One way you can work toward paying off credit card debt faster is to do a balance transfer from high interest rate credit cards to a 0% APR credit card. While constantly transferring balances can lead to problems, it can be helpful if you go about doing your balance transfer. You can save hundreds of dollars in interest charges by transferring credit card debt to a 0% APR credit card.
Saving money on a 0% APR credit card
If you are paying 13.99% interest rate (which is reasonable right now), it can become disheartening to see how much interest you are paying, especially if you are trying to whittle away your credit card debt. This is where the 0% APR credit card comes in. Instead of a significant amount of your monthly payment going to pay interest, a 0% APR credit card doesn´t charge interest for the introductory period, so all of your monthly payment goes toward reducing the credit card balance. This means that you can pay off your credit card debt faster, and save money in interest charges.
Things to keep in mind when getting a 0% APR credit card
There are some things to keep in mind when applying for a 0% APR credit card:
- Introductory periods vary. Some introductory periods are as long as 18 months, and others as short as 6 months. Carefully consider the interest rate introductory period.
- Late payments can adios your intro period. If you are late on a credit card payment, if you do not pay the full minimum payment or if you go over the limit, the introductory rate can be immediately revoked, and a much higher rate instituted.
- Applying too often can negatively affect your credit score. When there are a few inquiries into your credit in a limited amount of time, your credit score is affected. If you try to apply for more than one 0% APR credit card at once, or apply within six months, you could find your credit score affected negatively. Try to limit your balance transfers to once a year to avoid problems.
If you decide to take advantage of a 0% APR credit card balance transfer, you will need to make sure that you do some suitable financial planning. If the 0% APR credit card is a way for you to get out of debt faster, then you need to work on a plan to avoid accruing more debt while you pay off what you have. Another use for a 0% APR credit card is to use it for purchases that you know will take four or five months to pay off, especially business related purchases or repairs. If you know you can pay it off (and this is where financial planning helps) in a few months, using a 0% APR credit card can help you save money in interest charges.