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Balance Transfer

5 Things to Do Once Your Balance Transfer is Complete

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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You’ve been approved for and completed a 0% balance transfer deal. Congratulations. You’ve taken the single biggest step to accelerate your escape from credit card debt.

But while you’re set to save hundreds or thousands of dollars in interest charges, a balance transfer doesn’t close your old account and there’s still work to do.

Here are five things you need to do once the transfer is complete:

1. Cut up your new card

The biggest fine print trap of a balance transfer is what happens to new purchases you make on your new card.

You’ll get hit with the regular (not 0%) interest rate on them, so you don’t want to use it for any new purchases.

Let’s say you got approved for a $5,000 credit line and transferred $3,000 to your new 0% card.

You might think to keep things simple you can use the new card for your ongoing spending, and since you’re responsible you’ll pay the new spending off each month.

You then put $1,000 of new spending on the card, and then write a check to pay off the $1,000 at the end of the month.

Sounds fine, right? Wrong.

You’ll still be slapped with interest on that $1,000 in spending. Why?

You get hit with interest on the new purchases because you haven’t paid off the entire balance (transfer + new purchases).

So while you’ll still enjoy the 0% rate on the balance you transferred, until you pay that whole balance off any new spending you put on the card will get hit with the full standard interest rate (often 15% or more).

Instead, use a card that has no balance on it for your monthly spending, like the one you just transferred from. Or try a debit card. And cut up your new card to keep you from accidentally making purchases with it.

2. Resist the temptation to close old accounts

The first thing a lot of people do after a balance transfer is call up the bank and close their old account. While it’s satisfying to tell the bank that overcharged you to take a hike, we’re going to say don’t do that.

You want to keep your credit score high so, that if needed, you’ll be eligible for the best offers when your balance transfer expires. And having open credit lines that you’re not using, like the old card you just transferred from, is good for the health of your score.

That’s because it demonstrates you’re not maxing out all your credit.

If you’re worried about spending on the old card, just cut it up but leave the account open. Your old bank already loses because you’re no longer paying them those outrageous interest payments.

3. Set an appointment far ahead

Take the time now to set an alarm on your phone’s calendar for a year or so from now. Ideally, about 2 months before your balance transfer deal expires.

If you got an 18 month 0% deal, set a reminder 16 months from now and label it “BALANCE TRANSFER EXPIRES IN 2 MONTHS – SHOP AROUND.”

By then you may well have paid off your balance, but if you haven’t it will give you ample time to shop around for a new deal.

That way you can line up a new bank to move the balance and keep the 0% honeymoon going for another round.

4. Set up auto-pay

Decide how much you can pay on your new card each month. It might be just the minimum due if you have other debt you’re trying to tackle. Since your new card is at 0% you can focus your payments on that higher rate debt. But regardless of how much you pay, set it up on auto-pay each month.  You can do it online or call your bank to set it up.

The worst thing you can do is make late payments and damage your score, which keeps you out of the hunt for new deals, and if they are really late, put you at a much higher penalty interest rate.

With auto-pay there is no reason to miss a payment. You can time it for right after your paycheck normally hits so you know the money will be there and avoid any overdraft charges.

5. Get going with budgeting

You won’t get out of debt for good until you spend less than you earn each month. There are a whole host of free tools that will let you see where your spending goes each month and you’ll find it’s not just to the bills you dread the most.

Mint.com is a good site that will link your credit card and checking accounts in one place.

You can see if there are any charges you don’t recognize, or see if you’re spending too much on things that just don’t matter to you.

Prosper Daily (formerly known as BillGuard) is another site that keeps an eye open for phantom fees or recurring charges you may have forgotten like gym memberships. Small $5 habits add up fast. And getting rid of needless charges can free up more cash to tackle your debt so you won’t have to think about doing a transfer again.

If linking up accounts online makes you uncomfortable, then do it the old fashion way. Pull out your statements and read the charges one by one.

It might be scary at first, but get in the habit and you’ll be a master of cutting things out that just don’t give you much in return.

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Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Balance Transfer

When Letting Your Credit Score Drop Makes Sense

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Credit_Score_isnt_a_trophy_large

Balance transfers sometimes get a bad reputation in the personal finance community. People are hesitant to open up a new credit card, which could be understandable if their gun-shy nature were linked to their current debt. Unfortunately, many people back away from balance transfers – and saving hundreds to thousands of dollars – because applying for a new credit card will cause a drop in their credit scores.

We’re here to tell you a secret: it’s worth the drop.

How much will my score go down?

According to FICO, your score is calculated based on:

  • Payment history – 35%
  • Amounts owed – 30%
  • Length of credit history – 15%
  • New credit – 10%
  • Types of credit used – 10%

When you apply for new credit, which accounts for 10 percent of your score, there is a hard inquiry on your credit report. Lenders use your report and score to determine your reliability as a borrower.

Read what makes a 700+ credit score

promo-balancetransfer-halfFICO states, “In general, credit inquiries have a small impact on one’s FICO score. For most people, one additional credit inquiry will take less than five points off their FICO score.”

There are other factors, including how often you’ve applied for credit. If you haven’t opened a new line of credit in months or even years, then there should be no reason for your score to drop more than a handful of points.

The average credit card debt in America is $10,000. A balance transfer to a 0% interest rate could save the average American $3,675.

If you’re refusing to switching to a 0% interest rate, because your score would drop five points, that means you’re valuing each point at $735. A single point on your credit score is simply not worth $735.

How long until my credit score goes back up?

It generally only takes a few months for your score to go back up. In that time, you’ll need to demonstrate responsible use of your credit and not be incurring more hard inquires on your reports.

Your new line of credit will also increase your overall credit limit, which will help drive down your utilization ratio.

Utilization is the amount of your credit limit you use. If you’re credit limit is $4000 and you spend $800, then you are using utilizing 20% of your total credit limit.

The ideal utilization ratio is 30% or less, so the higher your credit limit the easier it is to keep your utilization rate low.

Who should be worried about a dip in a credit score?

If you’re planning to apply for a mortgage or loan to make a large purchase, then you want your credit score as high as possible. The higher your credit score, the lower your interest rates will be on your loan.

It is best to hold off on a balance transfer or any hard inquires on your credit report, until after you’ve secured a mortgage.

Don’t let your credit score just be a trophy

A credit score of 680 and above is something to be celebrated – celebrated by getting the best possible interest rates and using a strong score to your advantage.

Don’t let your credit score just sit on your mantle like a trophy. You should be wielding it as a weapon against outrageous interest rates that make it hard to pay off debt.

A high credit score gives you power. Use that power to save yourself hundreds to thousands of dollars.

Read the MagnifyMoney Guide to Balance Transfers or use our tool to see how much a balance transfer could save you!

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Balance Transfer

How to do a Balance Transfer with Barclaycard

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Barclaycard_BT

So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card in the mail and never more than 60 days after you apply, because you can lose the introductory offer.

Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

promo-balancetransfer-wide

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Discover, and you want to transfer it to your new Barclaycard account, then you will need the account number and balance of the Discover account.  And, in this example:

  • The transfer from account is Discover.
  • The transfer to account is Barclaycard.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer. Call center employees often receive a bonus to complete a balance transfer, so you will usually find a very eager person on the other side of the telephone line.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Barclaycard to Discover), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Barclaycard. Click on these names if you’re looking for a step-by-step guide for: Discover, Capital One or Chase.

1. Login to your account.  On the “Account Summary” page, you will see the option to Transfer a Balance Today under the section “Just For You”.

Barclaycard Arrival Plus

2. After clicking on “Transfer a balance today!” you will be taken (rather un-helpfully) to a page titled “Account Settings.”  You will see a lot of items on the page: Activated Cards, Account Nickname, Paperless Statements and more.  Scroll down the page until you see Balance Transfer Offers.  You will see a list of available offers.  If this is a new card, then you should see the introductory offer listed. Choose the appropriate offer, and click on Select this Offer.

 

 

Manage Your Pin

 

 

3.  You may be asked to answer a security question.  This is normal (remember, they will be making a credit card payment on your behalf, so higher fraud checks are possible).  Just answer the question and click Continue.

 

 

Answer Security Question

 

 

4.  You will now see a long page, where you will need to input the most important information.  On this page you will need to:

  1. Input the account number of the transfer to account.  So, in our example, this would be the account number of your Discover card
  2. You need to input the amount that you will be transferring.  Barclaycard will tell you, on the screen, the amount that you have available to transfer.  Remember: the amount that your transfer, including the fees, cannot be greater than the limit available.  When you input the amount, Barclaycard will show you the total amount being transferred, including fees (so that you do not have to do the math).
  3. You then need to scroll to the bottom of the page, and click on “I accept these terms and agree to receive them electronically.”
  4. Finally, click Continue.

Here is where you input your account number and balance transfer amount:

 

Balance Transfer Offers

Here are the Terms and Conditions of the offer.  Remember:

  • Never spend on the card: interest accrues right away
  • Always pay on time: you can lose your promotional rate

Loss of Promotional APR

And then scroll to the bottom so that you can click here:

Accept Terms

5.  You will then receive a summary.  In this example, I have transferred $100.  Make sure you click Continue

 

Balance Transfer Offers

 

You will then receive your confirmation screen.  Look for the magic words: You have successfully requested a balance transfer.

Remember: the payment from Barclaycard to your existing card is usually quick.  However, delays can happen.  And you do not want to be hit with a late fee on your existing credit card.  We recommend that you keep a close eye on your account, and you may have to make a payment before the balance transfer is complete.

Balance Transfer Offers

Once you see this screen, then you are in good shape.

Just Remember:

  1. Don’t spend on the card where you completed a balance transfer.  Interest will accrue on your purchases immediately.
  2. Make sure you pay on time.  Paying late can lead to a loss of your 0% interest rate.  And it would go to the penalty rate (typically close to 30%).
  3. Have a plan for the end of the balance transfer period.  You don’t want to be paying high interest rates.

Still have questions? Email us at info@magnifymoney.com or tweet us @Magnify_Money

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Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Balance Transfer

How to do a Balance Transfer with Capital One

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Cap_One_Large

So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card in the mail and never more than 60 days after you apply, because you can lose the introductory offer.

This post will explain how to do a transfer with Capital One. Just be warned: there are better balance transfer offers on the market than those offered by Capital One. We recommend:

Still picking a balance transfer option? Use our customizable tool. 

promo-balancetransfer-wide

Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Discover, and you want to transfer it to your new Capital One account, then you will need the account number and balance of the Discover account.  And, in this example:

  • The transfer from account is Discover.
  • The transfer to account is Capital One.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer. Call center employees often receive a bonus to complete a balance transfer, so you will usually find a very eager person on the other side of the telephone line.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Discover to Capital One), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Capital One. Click on these names if you’re looking for a step-by-step guide for: Discover, Chase, or Barclaycard.

1. Login to your account.  On the “My Accounts” page, you will see the option to complete a balance transfer. Click on Transfer a Balance.

 

Capital One

 

2.  Select an Offer. You should see the introductory offer listed.  (In this example, you are looking at my credit card – which I have had for a while.  No intro offer is listed)

 

Capital One

 

3.  Input the following:

  • The name of the bank you want to transfer a balance from (they will pre-populate the bank’s address)
  • The account number of the credit card that has your debt right now.  This is the account number of the transfer from account.
  • The amount that you want to transfer

If you don’t have your other account information handy you can also have Capital One send a ‘No Hassle Check’ directly to you. Just deposit into your account and write a check of your own directly to the card you want to pay off.

 

Capital One

 

4.  You will then be shown the terms and conditions of the balance transfer offer, which you will need to accept.

 

Here are the most important items:

  • Make sure the terms of the balance transfer match the terms of the offer when you applied. If you are expecting a 0% fee and a 0% interest rate for 15 months, make sure that is what you see. If there are any issues, call the bank directly.
  • Never spend on the card. As we have highlighted below, the bank makes it clear that any new spending will result in interest being charged.
  • Make sure you pay on time.  If you go 60 days late, you will lose your balance transfer offer

Capital One

5.  You will then receive your confirmation.  Capital One will pay your existing credit card bill to roll the debt over to their bank.  But, it can take up to 3 weeks.  So, we recommend that you make the minimum payment if your bill is due in the next 3 weeks.

Once you see this screen, then you are in good shape.  Just remember:

  1. Don’t spend on the card where you completed a balance transfer.  Interest will accrue on your purchases immediately.
  2. Make sure you pay on time.  Paying late (60 days) can lead to a loss of your 0% interest rate.  And it would go to the penalty rate (typically close to 30%).
  3. Have a plan for the end of the balance transfer period.  You don’t want to be paying high interest rates.

Get debt free forever by downloading our FREE guide!

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Still have questions? Email us at info@magnifymoney.com or tweet us @Magnify_Money

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Balance Transfer

How to do a Balance Transfer with Discover

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Discover_BT1

So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card. The faster you transfer the debt, the faster you can start saving money.

Haven’t applied for a balance transfer with Discover yet? You can get 0% intro balance transfer APR for 18 months with a 3% balance transfer fee. 

Discover it® - 18 Month Balance Transfer Offer

LEARN MORE Secured

on Discover’s secure website

Rates & Fees

Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Chase, and you want to transfer it to your new Discover account, then you will need the account number and balance of the Chase account.  And, in this example:

  • The transfer from account is Chase.
  • The transfer to account is Discover.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Discover to Chase), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Discover. Click on these names if you’re looking for a step-by-step guide for: Chase, Capital One or Barclaycard.

  1. Login to your account. Under the “Credit Options” tab, you’ll see the option to complete a balance transfer. Click on “See offer”.

 

Discover

 

2. Select an offer. You’ll see the introductory offer listed.

 

Discover

 

3. Input the following:

  • The account number of the credit card(s) that has your debt right now.  This is the account number of the transfer from account.
  • The amount(s) that you want to transfer

 

Discover

 

You can only transfer the credit limit given on your new card. So, if your Discover card has a $5,000 limit and you have $8,000 of credit card debt you want to transfer, you can only move $5,000 over to Discover.

4.  You will then be shown the terms and conditions of the balance transfer offer, which you will need to accept.

Here are the most important items:

  • Make sure the terms of the balance transfer match the terms of the offer when you applied. If there are any issues, call the bank directly (you can reach Discover at 1-866-240-7940).
  • Make sure you pay on time.  If you become delinquent, you could eventually lose the 0% promotional offer.

5.  You will then receive your confirmation. Discover will pay your existing credit card bill to roll it over to their bank.  But, it can take up to 3 weeks.  So, we recommend that you make the minimum payment if your bill is due in the next 3 weeks.

Once you see the confirmation screen, then you are in good shape.

Remember:

  1. Make sure you pay on time.  Paying late (60 days) can lead to a loss of your 0% interest rate and it would go to the penalty rate.
  2. Do your best to pay off as much of the debt as possible while you have the promotional rate.

Still have questions? Email us at info@magnifymoney.com or tweet us @Magnify_Money

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Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Balance Transfer

3 Traps of a Balance Transfer and How to Protect Yourself

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

View of businesspeople reaching across a table.

At 5 o’clock in the morning, you rouse yourself from bed, put on a t-shirt and old jeans, and head out to your garage. You pull all your unwanted collectables and last seasons’ clothing out of boxes and start laying them out on tables with price tags. An hour later – the local yard sale aficionados have descended upon your lawn to pilfer the things you don’t want and find some hidden treasures in your junk pile.

Balance transfers aren’t much different. In both cases, you’re trying to get rid of something you don’t want and someone else finds it valuable.

What is a balance transfer?

You may not like your credit card debt – in fact we hope you hate it – but banks love it. Why?  Debt makes the banks a lot of money. Every year, banks make billions of dollars on credit cards, so banks are constantly looking to get more of your debt.

A balance transfer is a way for them to steal your debt from the competition.

Imagine you work at Citibank.  You have a customer who has $5,000 of debt at Chase, and you want to convince that customer to move their debt from Chase to Citi.  What do you do?  You give her a great switching incentive (just like when your cable company offers you a great rate for the first 12 months of a contract).  So, you tell the customer that she can pay 0% for the next 18 months.  All that person needs to do is pay a one-time fee of 3%.

Almost all balance transfers have the following features:

  • A one-time fee:  these fees are usually between 3% – 4%.  They are charged up-front and added to the balance.

  • A promotional interest rate, usually 0%:  these promotional rates can last from as few as 6 to as many as 48 months.

How do banks make money?

So, the customer moves her debt from Chase to Citi.  Is the bank happy to be charging such a low interest rate?  Of course not!  Our Citibanker expects the customer to do one of the following:

  1. Miss a few payments.  Before the CARD Act, a single missed payment (even by 1 day) meant the bank could increase the interest rate from 0% to a punitive 30% or higher.  That is no longer allowed.  But, if you go 60 days past due, the bank can increase your rate.

  2. Spend on the card.  If you start spending on the card, then your balance won’t go down.  Even better for the bank, interest will start accruing on the money you spend right away (unless you pay off the full balance, including the balance transfer)

  3. Still have a balance at the end of the promotional offer.  If you are given 0% for 18 months, banks are betting that you will still have a balance in month 19.  And if you have been spending on your card, it could be a big balance.  From month 19, the bank will start charging a nice high interest rate and your payment goes up.

Unfortunately, a lot of people fall into these traps.  That is why banks keep offering balance transfers. But, if you are savvy, you can easily avoid all of these traps.

  1. Set up an automatic debit as soon as you get the card and complete the balance transfer.  You will never be late.

  2. Once you get the card, put it in the freezer (hypothetically of course).  Never spend on it!

  3. Make sure you have a plan for the end of the balance transfer.  If you have 0% for 18 months, then make sure you shop around for the next balance transfer in month 18 so that you don’t have to pay the high go-to interest rate.

But the bank charges a fee.  Do I really save money?

promo-balancetransfer-halfSo many people write about their fear of the balance transfer fee.  Here is a general rule: if you can pay off your debt in 6 months or less, then the fee is not worth it.  If it will take longer than 6 months, than it is almost definitely worth it.  We will do the math for you on our Balance Transfer page.  I think you will be shocked by how much you can save.

Let’s break it down: $10,000 of debt at a 20% interest rate.  You decide to do an 18 month balance transfer with a 3% fee.  So, you pay a $300 fee up-front.  That fee may sound scary ($300 is a lot of money), but, during the next 18 months, you would have paid $2,758 of interest.  You will be savings $2,458 over 18 months.

Just think about it.  Rather than giving $2,458 to the bank, you can pay off your debt so much faster!

Feel up to the challenge? Let’s walk you through how to get a balance transfer!

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Balance Transfer

Fire Your Bank and Cut Your Interest by 90% with a Balance Transfer

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

High_interest

Credit card debt is nasty business. Every month you throw your hard-earned money at your debt and yet your balance never seems to go down all. Your stagnant balance is the result of a banker’s best friend: insanely high interest rates, which he happily applies to your credit card.

High-risk means high interest

The average interest rate on a credit card is often cited at 15%, but that number is misleading. Banks can average out a lower interest rate by awarding low-risk customers (people who pay their balance in full every month) a low interest rate – often below 15%. Simultaneously, they spike the interest rate on higher-risk customers who borrow money using a credit card. Those rates are often higher than 15% and can even tip the scale towards 30%.

What does that mean in real terms?

  • You have $10,000 of credit card debt at a 20% interest rate.

  • You will have a minimum payment of approximately $276

  • Over the course of a year, you will make more than $3,000 of payments

  • $1,893 of that is interest

  • That equals an average $158 per month of interest to the bank

That high interest rate means that your hard-earned money is going into the pockets of bankers, rather than paying down your debt.

It’s no wonder that in our recent survey, 78.8% of Americans with debt believe that their interest rate is too high.

How to pay off your credit card debt

To get serious about paying down your debt, you need to keep two things in mind:

1.  Can you pay more each month towards your debt?

2.  Can you reduce the interest rate on your debt?

We know that brown-bagging lunch and cutting the daily latte habit gives you a nominal sum to throw at your debt, but the most effective way to pay down debt faster is reduce your interest rate.

(All while living below your means of course.)

In the example above, you would be spending nearly $2,000 in the next 12 months on interest.  If you could cut that rate in half, you would take years off the time to pay off that debt.

Shopping for lower interest rates doesn’t show lack of character

Just imagine you are the CFO (Finance Director) of a business.  You borrowed money to fund expansion plans.  You are currently paying 20% on that debt.  Banks are offering interest rates as low as 4%.  But you don’t do the work to get the 4% interest loan, because you think it shows a lack of character. You borrowed the money, so you need to pay it off. It is highly likely that you would have a short career as a Finance Director. You would be fired. And your replacement would immediately re-finance the debt at 4%. The money saved could then be used to pay down the debt more quickly or re-invest in the business.

You should run your family financial affairs no differently. You should be looking to keep your interest expense as low as possible. You can then use the money you save to pay down your debt faster.

In most cases, the banks aren’t rewarding you for being a loyal customer. They aren’t operating with buy-nine-get-the-tenth-one-free coupons! Instead, the longer you have had your credit card, the more likely the rate is even higher than 30%.

Before the CARD Act was implemented in 2010, banks used to participate in a fiendish little trick called repricing. With little disclosure, banks could rapidly, dramatically and legally increase your interest rates. And they did it often

Just because you accrued debt on a card with Bank A doesn’t mean you should subject yourself to their abusive interest rates.

Time to start looking at a balance transfer

At MagnifyMoney, we love balance transfers. They are the single best way to reduce the interest expense on your credit card. If used properly — and you must follow the rules– you can slash your interest expense by 90% or more.

And when we did a survey, 89.1% of Americans who did a balance transfer in the past would do one again.

Not sure what a balance transfer is or how to get one? Don’t worry, we’ll take you by the hand and explain it all.

promo-balancetransfer-wide

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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