As a consumer, you have probably realized that credit cards are tools that can really help you or really harm you. If used irresponsibly, credit cards can get you in horrendous binds, leaving you in debt for years and ruining your chances of getting credit for major purchases like homes or vehicles. If you are one of the many unfortunate people who have found themselves suddenly drowning in credit card debt, understand, first and foremost, that this does not make you a bad person; secondly, rest assured that there are ways out.
Many people are using credit card balance transfer services as a way to shift high-interest debt to low or 0% balance transfer credit cards. Transferring a balance from one card to another is easy, but there are certain things to remember in order to avoid the pitfalls of this debt relief tool. The first thing you need to do is obtain a credit report so you have a good idea of what your credit history is like. If you have good credit, you should have no problem getting approved for a 0% balance transfer interest rate. If you're lucky, you may even be able to find a card that offers a no fee balance transfer--but more than likely, there will be an average fee of 3%. These days, it's pretty rare to find a card that has no balance transfer fee, but you may be fortunate enough to find one.
If your credit card debt exceeds $10,000, you probably won't be able to transfer the entire debt to one card. Most credit card companies have limits to the amount you can transfer. Assuming you have to pay a fee upwards of 3% just to make the transfer, it would be more feasible to split it between two cards anyway. I know, I know...the last thing you want to do is accumulate more credit cards, but if you get approved for a 0% balance transfer for each card, the money you're not paying in interest could add up to hundreds or even thousands of dollars when it's all said and done. If the idea of transferring debt to multiple cards makes you cringe, simply moving as much money as possible to one card will still help you start saving immediately.
Balance transfers can be really smart moves, but keep in mind that it takes time to pay off large credit card debts. Prepare yourself to use some willpower and discipline. In order to get the best possible result from your credit card balance transfer, you cannot keep charging your card(s). Take advantage of the fact that you have a low or 0% balance transfer interest rate. Dedicate yourself to getting the card paid off in a timely manner, because it's likely that your low APR won't last forever--probably one year at the most. Try to use as much foresight as possible when managing your finances. Many people have waited until the last minute before taking steps to correct their debt problems. The more you can regulate debt accumulation early on, the less likely it will be that you'll have to face excessive amounts of debt down the road.
Written by Kacy Suther. Relieve debt with a
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