The Best Credit Card? How To Avoid Debt, Pay Bills With Balance-Transfer Options

This article originally appeared on the Motley Fool.

If you're paying high interest rates, it can be tough to pay off credit card debt. Fortunately, there are an abundance of 0% APR balance-transfer offers on the market right now that can help. Here's an overview of some of the best balance-transfer credit cards that can help you save money and pay off your debt fast.

The problem with paying off credit cards

Let's say that you owe $5,000 on a credit card, and that your card charges 18% interest. Your minimum monthly payment is 2% of your outstanding balance, which translates to $100.

However, based on your 18% interest rate, a $5,000 balance costs $75 per month in interest alone. So, if you just make the minimum payment, three-fourths of your minimum payment will be used to pay interest charges. Just $25 will be used to reduce the amount of money you owe.

Of course, this is a simplified example, and it's not a good idea to pay only the minimum payments each month. The point is that if a significant amount of the money you pay to your credit card company is going toward interest, and not paying down your debt, it can take a long time to pay off your credit card.

In our previous example of $5,000 in credit card debt at 18% interest, making a $100 monthly payment would take you 93 months (almost eight years) to pay off the debt. What's more, you'll end up paying a total of $9,300, or nearly twice the original balance.

A balance-transfer card can help solve the problem

Fortunately, there's a way to avoid paying interest. Many credit cards offer introductory 0% interest rates on balance transfers, and thanks to the intense competition in the credit card industry, these offers have never been more generous.

If you transfer your credit card debt to a 0% APR balance-transfer card, every penny you send to your credit card issuer will be applied to the principal -- and not to interest. This can help you get your credit card debt under control much faster, and save hundreds or even thousands of dollars in interest.

Some of the best balance-transfer credit cards on the market

There are many 0% APR balance transfer offers on the market right now, many with introductory periods of a year or more.

One of my favorite examples is the Citi Simplicity, which features an industry-leading 21-month 0% APR period on balance transfers and purchases. For transferring a balance, you'll pay a fee equal to 3% of the transferred amount, which is the industry standard balance-transfer fee. The card has no annual fee and no late fees.

The Chase Slate is a unique example of a balance-transfer card, in that it not only has a 15-month 0% APR period, but it also offers an introductory transfer fee waiver during the first 60 days. You'll also get free access to your FICO score, and the card has no annual fee.

The Foolish bottom line

After you transfer your balance to a 0% APR card, don't just make the minimum payments. Since every penny you pay will go toward the principal balance, the smartest thing you can do is aggressively pay down your debt during the introductory period.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.