Balance transfers were great back in the easy-credit days of yore. With 0% credit card offers and no-fee balance transfers you could move balances around without issue. Now that the economy has contracted, balance transfer fees are back in the 2-5% range and 0% interest offers are getting harder to find. However, there is a method that can get you around the balance transfer fees and help you pay less on your existing credit card debt.
In a previous article, I demonstrated how it was possible to arbitrage a credit card using the US Mint's Direct Ship Program. This form of arbitrage effectively amounts to a free loan from the Mint which you can use to invest in high interest accounts or obtain credit card rewards. To summarize the process, you simply need to go to the Direct Ship Program's web page and purchase 1 or 2 boxes of Presidential Dollar coins with your low interest credit card. The Direct Ship program offers free shipping at this time and the coins usually arrive within 1 week of purchase. Please see my previous article in the resources section if you want a detailed outline of how this process works.
Once you have received the coins from the US Mint, simply put the money in your bank account and use the funds to pay down the balance on your high interest credit card. Voila! You have effectively transferred the balance of your high interest credit card to a lower interest card via a purchase of legal tender from the US Mint. And no balance transfer fee was paid!
Even though banks have increased the fees and interest rates on credit cards, balance transfers are still a useful way to manage your credit history. Just remember to keep the ratio between the amount of credit available and the amount owing as low as possible, and always make your payments on time. The length of your credit history also affects your score so don't close the account if the high interest card you are transferring the balance from is old. Just leave it open with a zero balance and your credit history should remain unaffected.
Finally, you should consider looking for fixed interest rate loans or lines of credit rather than low interest credit card offers if you need to consolidate debt over long periods of time. Most low interest credit card offers only last 6-12 months in this market and then they usually sky rocket up to 18+%. You would be much better off with a 5-7% fixed interest loan in such a situation.