Dear Savvy,

I have two credit cards with high interest. Should I pay them off with my one card that has zero percent interest to reduce paying over $750 annually in finance charges?

Savvy says: I'm assuming by "paying them off" you mean transfer your existing balances to an introductory rate, zero percent card. There are a number of questions you need to address before making this type of decision. To see my advice, read more.

You need to be clear about when the introductory rate ends and the new interest rate kicks in. Is it higher than the interest rates on your current cards? If so, you could end up paying more interest in the end. Zero interest cards do not exist because credit card companies are generous; they are tools for roping in new customers, and the companies hope to make money off you soon enough.

Also, you should only consider doing this if you can put the old credit cards to bed after you've transferred the balances, so that you don't have a huge amount of existing credit to fall back on. You could just end up deeper in debt. Don't actually close the accounts if they've been open for a long time because that could actually harm your credit score, but ignore them unless you're making small purchases a couple times a year to keep the accounts active (and paying off those balances immediately).

If you decide on this plan of action, use the interest-free period to work on paying down your debt. Put the additional $750 that you'll be saving toward the balance and come up with a plan to pay down your debt that includes making payments beyond the minimum. You don't want to get into the habit of continually opening up cards with low introductory rates and just shifting around your debt — that's not going to make you debt-free.