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When Should You Consider Bankruptcy & How to File

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Updated – November 14, 2018

If you’re drowning in debt and having trouble keeping up with your payments while still handling your living expenses, you may have at least begun to consider filing for bankruptcy.

Filing for bankruptcy is meant to give people in serious financial distress some relief and a chance to start over. By the time most people get to that point, they’ve probably tried many other methods for managing their debt.

Bankruptcy certainly has its benefits, potentially allowing you to wipe the slate clean and start anew.

But there are a lot of things to consider before making a decision, from the negative consequences of filing to whether bankruptcy would even provide relief for your specific situation.

“For most folks that come in, this is the last option,” said John Colwell, a San Diego, Calif.-based bankruptcy attorney and President of National Association of Consumer Bankruptcy. “I know I’m like the dentist. People really don’t want to be sitting in front of me.”

This is a big decision that requires a significant amount of due diligence before moving forward. While it’s important not to take bankruptcy lightly, it may be the best way for people to get back on their feet.

So how do you know if bankruptcy is the right way to relieve your debt? In this post, we’ll go over some of the key points to help you get started.

The basics of filing for bankruptcy

Bankruptcy is a legal procedure to discharge debt built up by someone who either will not be able to repay those debts or does not have the means to repay debts owed currently. There are two notable forms of bankruptcy: Chapter 7 and Chapter 13.

In a Chapter 7 bankruptcy, a debtor’s nonexempt assets are sold and the proceeds are used to pay debts. An individual must pass a means test before they can file a Chapter 7 bankruptcy to ensure that the court would not be abusing the bankruptcy law by granting one. We will talk more about the means test below!

A Chapter 13 bankruptcy is a “wage earner plan.” To qualify, an individual must have a steady income. This allows them to pay back all or part of their debts by developing a repayment plan. The plans last between three and five years.

In most cases, bankruptcy does not protect you from any future debts incurred. It also will have an effect on your credit score and remains on your credit report for 10 years with Chapter 7 and seven years with Chapter 13. In a Chapter 7 bankruptcy, you may lose assets such as your house or your car depending on how much equity, if you’re able to exempt your equity and if you’re current on your payments.

Are You Eligible?

As stated above, there are two types of bankruptcy for individuals: Chapter 7 and Chapter 13.

There are some significant differences between the two programs, but here’s a high-level summary:

  • Chapter 7 allows you to completely discharge your debts, with some exceptions (such as student loans, certain tax obligations, and child support). But you may be obligated to sell some of your property to settle some of your debt obligations.
  • Chapter 13 allows you to create a payment plan to repay some or all of your debts over a 3-5 year period. So your debts are not discharged, but you will also not be obligated to sell any property in order to make your payments.

Either one could be more or less beneficial depending on the specifics of your situation. But the very first question is whether you qualify for either one, and each has its own set of criteria.

Chapter 7 bankruptcy has what’s called the “means test”, which is meant to ensure that only people who truly can’t afford their debt payments are allowed to file. There are two different wants to pass it, and therefore qualify for Chapter 7 bankruptcy:

  1. If your monthly income is less than the median monthly income in your state for your family size, you pass. You can find current median income numbers by family size here.
  2. If you don’t pass #1, you’ll have to go through a complex calculation to see whether your disposable income after subtracting out certain expenses is enough to satisfy your debt obligations. At this stage it would probably be best to talk to a professional who could help you navigate the process.

Eligibility for Chapter 13 bankruptcy is a little more straightforward. Here’s how it works:

  1. As opposed to Chapter 7, you need to prove that your disposable income is high enough to afford a reasonable repayment plan.
  2. Your secured debt (mortgage, auto loan) can’t exceed $1,149,525, and your unsecured debt (credit cards, medical bills, etc.) can’t exceed $383,175.
  3. You must have filed both federal and state income taxes each of the last four years.

There are some other requirements for each, but those are the major ones. Assuming you qualify for at least one of them, there are a few other things to consider.

What Kinds of Assets and Liabilities Do You Have?

Depending on the specifics of your financial situation, one type of bankruptcy may be preferable to the other. Or it may be that neither would actually be particularly helpful.

As an example, neither type of bankruptcy would likely help you all that much if your primary debts are student loans. They wouldn’t be discharged in Chapter 7 bankruptcy. And while your required payments might be reduced over the 3-5 year repayment period in Chapter 13 bankruptcy, once that was over you would have to continue paying them back as usual.

The type of assets you own and their value also matters, particularly if you’re going through Chapter 7 bankruptcy. During that process, your bankruptcy trustee is allowed to sell your property in order to settle your debts, but certain property is protected.

For example, your house and car are protected up to certain limits. Employer retirement accounts like 401(k)s and 403(b)s are fully protected, while IRAs are protected up to about $1 million. But other accounts, such as checking, savings, and regular investment accounts may not have the same protections.

The rules here vary by state, and having a strong understanding of which assets you might be able to keep and which you might end up losing will help you make your decision.

When to file bankruptcy

According to Colwell, filing for bankruptcy needs to be “worth your while,” meaning it should give you relief from your debts to ensure you don’t find yourself in a similar situation in the near future. That means that if you have major expenses that you are about to incur, you should wait to file until after you have incurred them so they can be included in the bankruptcy settlement. This is especially important when it comes to filing bankruptcy due to medical bills.

However, with a Chapter 13 bankruptcy, you can seek court approval to include new debt that you’ve incurred post-filing into your payment plan.

In general, though, there are aspects of your financial situation that signal when it’s time to consider bankruptcy. If you can’t pay your bills (and you don’t see that changing anytime soon) and your debt continues to pile up, bankruptcy is probably worth considering.

Here are other red flags to look out for:

  1. Debt collectors are calling. If you’re behind on your bills to the point that you’re hearing from debt collectors, it may be time to consider bankruptcy. This is especially true if you’re being sued by debt collectors.
  2. You’re in danger of losing your home. If you’re at risk for losing your house to foreclosure, filing bankruptcy can help you get caught up on your payments and keep your home. With Chapter 13, you’re given the chance to keep your home by creating a plan to repay your outstanding debt.
  3. You’re using loans to pay your bills. Using short-term high-interest loans such as payday loans can get you in trouble. With these loans, people borrow against their next paycheck. “People get caught in the trap and it starts rolling over from paycheck to paycheck to paycheck,” said Colwell. Title loans are another form of small loan where a vehicle is used as collateral; these loans can be problematic for someone already in financial distress.
  4. You’re liquidating your retirement assets. Retirement money is exempt in a bankruptcy, meaning trustees can’t use it to repay lenders. So in most cases, it doesn’t make sense to burn through your retirement money to pay debts. “I hate that with a passion,” Colwell said. “It’s your retirement money, what are you doing?!”

How to file for bankruptcy

Most initial consultations with lawyers are free of charge. At these meetings, you’ll walk a bankruptcy attorney through your financial situation and your reasons for wanting to pursue bankruptcy.

There are also ways for individuals to file for bankruptcy on their own, known as filing pro se. Court employees and bankruptcy judges can’t give out legal advice to people in their courts, so if you go that route, you will be on your own. To file yourself, you should be familiar with the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the local rules of the court.

Unless you have a strong understanding of legal issues and have the time to handle the paperwork, it’s probably best to use a lawyer — that’s because making a mistake can impact your rights, according to the U.S. Courts. You’ll also need the capacity to fill out a lot of paperwork, Colwell also noted.

If you use an attorney, they should be able to provide services including:

  • Advising you on whether to file a bankruptcy petition and under which chapter to file.
  • Telling you whether your debts can be discharged.
  • Advising you on whether or not you will be able to keep your home, car, or other property after you file.
  • Advising you of the tax consequences of filing.
  • Advising you on whether you should continue to pay creditors.
  • Helping you complete and file forms.

How to file Chapter 7 bankruptcy

A Chapter 7 bankruptcy involves the sale of all of your nonexempt assets to pay back your creditors. This is the most common kind of personal bankruptcy, accounting for more than 60 percent of all non-business bankruptcies in 2017. The process usually takes about four to five months.

Filing for Chapter 7 will wipe out your allowable debt (such as as credit card, medical and personal loan debt), but the bankruptcy will remain on your credit report for up to 10 years.

The first step is to take a mandatory credit counseling course from a government-approved organization, within 180 days of your filing date. Upon completion, you can decide if you still feel it appropriate to move forward with a bankruptcy, and move on to the next step.

At this point, you, or your attorney, would file your petition and other additional forms with the court. Along with your filing petition, the forms include a list of your creditors, a summary of your assets and liabilities, lists of property (both exempt and non-exempt) and any documentation needed for your “means test.” There are also companies that will send you a packet of all relevant documents, for a small fee.

At this point, you will be subject to the “means test.” If the debtor’s current monthly income is more than the state median, the means test is applied. Abuse is determined if the debtor’s monthly income over five years is either more than $12,850, or more than 25% of the debtor’s nonpriority unsecured debt of at least $7,700.

A trustee is then appointed to review the paperwork and take nonexempt property; you will also have to submit your most recent tax return to the trustee.

The next step in the process is a meeting of creditors, known as a “341 meeting.” At the meeting, you will answer questions about your finances and bankruptcy forms under oath. Creditors are allowed to attend the proceedings if they choose.

It is now decided if you are eligible to file for Chapter 7. At this stage, secured debts are determined: they can be repossessed by the creditor, you can redeem it by paying back what it’s worth or you can reaffirm the debt, which removes that debt from the bankruptcy filing and allows you to pay it back when the bankruptcy is over.

You will have another course to attend that will include information on developing a budget, using credit and managing money — afterward, your debt will be discharged.

Cost: A Chapter 7 bankruptcy needs to be paid for upfront by the debtor. It is generally a flat rate and may be contingent on the complexity of your debt structure as well as the market in which the attorney is operating.

How to file Chapter 13 bankruptcy

A Chapter 13 bankruptcy will last between three and five years, from start to finish. These processes are long and complex, so it’s strongly recommended that you use a lawyer. If you have a steady income, Chapter 13 bankruptcy allows you to keep property, like a house or car, that you might otherwise lose in Chapter 7. Chapter 13 develops a three-to-five year repayment plan for your debts.

The first step is to take a credit counseling course. Afterward, you or your attorney will prepare and file a bankruptcy petition and paperwork that includes a list of your creditors, a summary of your assets and liabilities and your Chapter 13 repayment plan; you will also need to provide your most recent tax returns.

The court will later appoint a trustee to administer your case and a stay on collections will take effect — this means that certain creditors won’t be able to proceed with lawsuits against you, call you for repayment or garnish your wages. You’ll begin making payments for a month after you file the paperwork. In addition, like Chapter 7, Chapter 13 also requires a 341 meeting.

You or your lawyer must attend a confirmation hearing where objections to your plan either by the trustee or the creditors will be addressed and eventually your plan for repayment will get confirmed.

Your creditors will also file proof of claim so that they can get repaid; it is at this point that you can object to the claim if you feel it is unfair.

The repayment period begins when you start to comply with your plan’s requirements and payments; this is the longest portion of the bankruptcy. If required by your plan, you may also have to submit documents to the court like income and expense statements.

Exactly as in Chapter 7, you’ll have another course to attend that goes over budgeting, using credit and managing money. Afterward, your debts may be discharged and your case closed.

Cost: There are two ways an attorney can charge you for handling your Chapter 13. It may be a “no look” fee, a flat fee set up by the district in your state, or they can bill you hourly. Your payment to your attorney can be worked into your Chapter 13 repayment plan.

Conclusion

Filing for bankruptcy is a big decision, and in the end you’re the only one who will know what’s right for you.

Bankruptcy can be not only a long process, but also a very emotional one for those seeking to discharge debts.

Do your research, evaluate all of your options, and then make the decision that most helps you reach your personal goals.

Looking into your options sooner rather than later may help you shore up your financial future and lose less in the long term.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Matt Becker
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Matt Becker is a writer at MagnifyMoney. You can email Matt here

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Kate Rockwood is a writer at MagnifyMoney. You can email Kate here

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Americans in These States Are Most Stressed About Their Finances

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Personal finance can be stressful, but not every American is dealing with the same hurdles. That’s why MagnifyMoney, a subsidiary of LendingTree, analyzed Google Trends data to see which states expressed the most interest in the following nine areas: credit card debt, student loan debt, credit score, loan refinance, payday loan, debt relief, bankruptcy, debt collection and debt consolidation.

Researchers rated which states were most and least stressed based on how many locals were searching nine personal finance terms on Google. Data was measured between 0 and 100 to represent the popularity of a search. The state with the highest number of searches represents the top of the popularity scale, ranking at 100. Other states were then given a percentage number based on how they compared to the top state.

Key findings

  • New York took the top spot as the most financially stressed state with a final score of 80.7 across the nine Googled terms. Payday loans were the least searched term; in New York, it scored just 16 in relative interest.
  • Louisiana came in second. In contrast to New York, payday loans were a popular search.
  • Nevada takes third. This state scored highest in debt relief and debt collection.
  • Southern states featured prominently in the top 10. Apart from Louisiana in second place, Missouri, Alabama, Mississippi and Virginia also claimed top 10 spots. Aside from Virginia, states in the southeast tend to lag behind the rest of the country in terms of income, although their cost of living also tends to be lower. Mississippi and Alabama also have elevated poverty rates.
  • The bottom spots of the list, which represent the least financially stressed states, were filled by Northeastern states: Vermont, Connecticut and New Jersey.
  • Alaska and Hawaii also both scored well; they searched stressful financial topics significantly less often than other states. Neither Googled payday loans very often.
  • Payday loans had the lowest search popularity with an average of 32 across the states. That means the average state searched it on the web 32% as often as the top state, which is Louisiana in this case.
  • Although Wyoming had the highest relative search frequency for debt collection and debt consolidation, it scored a zero for student loan debt and loan refinance. This pushed the state into the middle of the pack.

What financial stressors are weighing on your state?

In the below map, hover over each state to view its ranking (with a score of 1 being the state with the most Google searches related to financial stress) and its average score. This average score accounts for how frequently residents Googled the nine analyzed search terms.

Below that, you’ll see a more in-depth chart that breaks down each state’s scoring across the nine terms. The higher the score, the more frequently the term was searched.

5 most financially stressed states

1. New York

New York state scored highly across almost all keywords searched, especially topics regarding credit card debt (100), loan refinancing (99) and debt relief (99). The only category it placed lowly was payday loans (16). This is something worth celebrating when you consider the notoriously high interest and fees on payday loans.

New Yorkers appear to be struggling across the board, at least in New York City. The Big Apple is the second-worst metro for a balanced lifestyle, according to another MagnifyMoney study. Income and housing prices were two of the main issues that lead to such a low lifestyle score.

2. Louisiana

Louisiana is the second-most financially stressed state, thanks to high search frequency for payday loans (100), credit scores (89), and debt relief (88). Debt and the fear residents may have surrounding it seem to be a primary concern. A desire to pay off debt may be why so many Louisiana residents are investigating payday loan options.

In a separate study on the happiest U.S. states, Louisiana came in as one of the unhappiest states. While their financial troubles may be weighing down residents, other factors like health and lifestyle pulled the state down in rankings.

3. Nevada

Nevada’s luck may be running out. At least for those who are financially stressed about debt relief (100), debt collection (91) and bankruptcy (78). Nevada residents appear to be searching for help to pay off debt and avoid bankruptcy. Their financial stress may be taking a toll on their happiness; like Louisiana, Nevada was among the 10 unhappiest states.

One financial area Nevada residents doesn’t appear to be as concerned with is student loans. The state holds a ranking of 51 out of 100 when it comes to Googling student loans.

4. Virginia

Virginia is one of four southern states that had the misfortune of making into the 10 states most stressed about personal finance. They scored fairly high across all topics analyzed, except for payday loans (ranked at 36). Their No. 1 concern appears to be bankruptcy (90), followed closely by debt relief (89).

That being said, not all of Virginia appears to be struggling due to financial issues. Virginia Beach in particular was found to be one of the top 10 metro areas (out of the 50 largest in the U.S.) that live a balanced lifestyle.

5. Mississippi

Mississippi’s top concerns were related to credit scores (100), bankruptcy (89) and payday loans (90) — all important financial issues that could signal financial struggles.

Mississippi residents may be struggling with credit card debt in particular. MagnifyMoney found that Mississippi households had an average credit card debt of $6,217.60. The state was also the fifth-least happy state in the U.S., which is another potential sign of financial struggles.

5 least financially stressed states

51. Vermont

Vermont, everyone’s favorite spot for a cozy weekend at a bed-and-breakfast, is pretty relaxed when it comes to personal finance. The state landed the coveted least-stressed state on the list.

The state ranked very low for searches on issues like payday loans (6). Needing a payday loan can be a sign of larger financial issues, so scoring low for this term can be a positive indicator of good financial health among Vermont residents.

50. Connecticut

Similar to Vermont, Connecticut has a low interest in payday loans (11). There was a large disparity between the second-lowest state on this list (Connecticut) compared to the second highest; Louisiana had a ranking of 100 when it came to payday loan issues.

Connecticut also fared well when it came to searching for debt relief (40). The area residents seem to struggle with most is credit card debt (70).

49. New Jersey

Things are looking up for the Garden State. New Jersey was the third least-stress state when it came to personal finance. Their top concern, bankruptcy, ranked at 71. But the top three states with the most financial stress, New York, Louisiana, and Nevada all had scores of 77 or higher when it came to this particular issue.

48. Alaska

Aside from payday loans (21), Alaska residents worry about specific financial topics pretty evenly. Their scores across the eight other terms range from 49 to 69, with a total average of 56.

But the one financial topic they really aren’t happy about is credit card debt. Their highest ranking concern checks out, when you consider the average Alaskan household has over $11,400 in debt, according to another MagnifyMoney study.

47. Hawaii

It seems like living the island lifestyle is paying off. Hawaii residents have fairly low concerns about personal finance compared with other states. They ranked fairly low when it came to taking an interest in payday loans (24).

But similar to Alaska, Hawaiians expressed some concerns over credit card debt. Households in Hawaii also have over $10,000 in credit card debt on average. While they’re doing well compared to most other states when it comes to stress, Hawaiians have some progress to make when it comes to financial wellness.

Methodology

In order to rank the most financially stressed states, researchers analyzed Google trends data for nine terms: Credit card debt, student loan debt, credit score, loan refinance, payday loan, debt relief, bankruptcy, debt collection and debt consolidation. Google trends data covers the July 26, 2016 to July 26, 2019 time period.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jacqueline DeMarco
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Jacqueline DeMarco is a writer at MagnifyMoney. You can email Jacqueline here

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Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

There are a lot of 0% APR credit card deals in your mailbox and online, but most of them slap you with a 3 to 4% fee just to make a transfer, and that can seriously eat into your savings.

At MagnifyMoney we like to find deals no one else is showing, and we’ve searched hundreds of balance transfer credit card offers to find the banks and credit unions that ANYONE CAN JOIN which offer great 0% interest credit card deals AND no balance transfer fees. We’ve hand-picked them here.

If one 0% APR credit card doesn’t give you a big enough credit line you can try another bank or credit union for the rest of your debt. With several no fee options it’s not hard to avoid transfer fees even if you have a large balance to deal with.

1. The Amex EveryDay® Credit Card from American Express – Introductory 0% for 15 Months on balance transfers and purchases, $0 balance transfer fee.

This offer edges out competitors with the longest 0% intro period and standout perks. The Amex EveryDay® Credit Card from American Express has increased value with an intro 0% for 15 Months on purchases and balance transfers, then 14.49% - 25.49% (Variable) APR and a $0 balance transfer fee. (For transfers requested within 60 days of account opening.) In addition to the great balance transfer offer, you can earn rewards — 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

2. BankAmericard® credit card0% Introductory APR on purchases for 18 billing cycles, $0 Introductory Balance Transfer Fee

Cardholders can benefit from an 0% Introductory APR on purchases for 18 billing cycles and an introductory $0 balance transfer fee for the first 60 days your account is open. After that, the fee for future balance transfers is either $10 or 3% of the amount of each transaction, whichever is greater. Once the intro period ends, there is a 14.49% - 24.49% Variable APR. You can benefit from a $0 annual fee and access to your free FICO® Score.

When to consider a fee

While no-fee balance transfer cards are great, sometimes it may be worthwhile to consider a balance transfer card with a balance transfer fee. The fee will be a percentage — typically 3% or 5% — of the total amount you transfer, but cards that charge balance transfer fees often have longer intro periods. If you can’t afford the high monthly payments required to pay off your balance before the end of a 15-month intro period, a card offering a longer intro period — such as 18 months — can provide lower monthly payments while still allowing you to pay off your balance before the end of the intro period. Below, we provide an example that should help you decide when you should consider a fee.

For this example, we’re assuming $6,354 in credit card debt, which is the average balance Americans have, according to Experian’s 2017 State of Credit report.

By choosing the card offering an intro 0% for 18 months and a 3% transfer fee, you’ll only have to pay $364 a month to pay your debt and the balance transfer fee off in full during the intro period. That’s $60 less than the $424 monthly payment required by the card with an intro 0% for 15 months. Just beware that while you’re saving month to month, overall, you will end up paying about $190 more due to the balance transfer fee.

If you need a longer intro period and lower monthly payment, we recommend the Discover it® Balance Transfer or the Wells Fargo Platinum card. The Discover it® Balance Transfer offers an intro 0% for 18 months on balance transfers (after, 13.49% - 24.49% Variable APR) and has a 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

The Wells Fargo Platinum card has an intro 0% for 18 months on qualifying balance transfers and has a 3% for 120 days, then 5% balance transfer fee. After the intro period, it has a 16.99%-26.49% (Variable) APR.

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Intro BT APR
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Regular APR
13.49% - 24.49% Variable
Balance Transfer Fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Credit required
good-credit
Excellent/Good

Wells Fargo Platinum card

The information related to Wells Fargo Platinum card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Wells Fargo Platinum card

Intro Purchase APR
0% for 18 months
Intro BT APR
0% for 18 months on qualifying balance transfers
Regular Purchase APR
16.99%-26.49% (Variable)
Annual fee
$0
Credit required
good-credit
Excellent/Good

3. Chase Slate® – 0% Intro APR on Balance Transfers for 15 months and 0% Intro APR on Purchases for 15 months, $0 Introductory Balance Transfer Fee

This deal is easy to find – Chase is one of the biggest banks and makes this credit card deal well known. Save with a 0% intro apr on balance transfers for 15 months and intro $0 on transfers made within 60 days of account opening. after that: either $5 or 5%, whichever is greater. You also get a 0% Intro APR on Purchases for 15 months on purchases and balance transfers, and $0 annual fee. After the intro period, the APR is currently 16.74% - 25.49% Variable. Plus, see monthly updates to your free FICO® Score and the reasons behind your score for free.’

4. Platinum Card from Navy Federal Credit Union – 0% introductory APR for 12 months on balance transfers, NO FEE

Platinum Card from Navy Federal Credit Union
The Platinum Card from Navy Federal Credit Union offers a 0% introductory APR for 12 months on balance transfers (after a 7.49% and 18.00% Variable APR). Note: This offer expires on Jan. 2, 2020. Since Navy Federal is a credit union, membership is required to open this card. You can qualify if you or one of your family or household members has ties to the armed forces, DoD or National Guard. Find out more about membership qualifications on Navy Federal.

5. Edward Jones World MasterCard® – Intro 0% for 12 billing cycles on balance transfers, NO FEE

Edward Jones World MasterCard®
You’ll need to go to an Edward Jones branch to open up an account first if you want this deal. Edward Jones is an investment advisory company, so they’ll want to have a conversation about your retirement needs. But you don’t need to have money in stocks to be a customer of Edward Jones and try to get this card. Just beware that you only have 60 days to complete your transfer to lock in the intro 0% for 12 billing cycles, and after the intro period a 14.99% Variable APR applies.

6. Choice Rewards World MasterCard® from First Tech FCU – Intro 0% for 12 months on balance transfers, NO FEE

Choice Rewards World MasterCard® from First Tech FCU

Anyone can join First Tech Federal Credit Union by becoming a member of the Financial Fitness Association for $8, or the Computer History Museum for $15. You can apply for the card without joining first. The intro 0% for 12 months and no transfer fee on balances transferred within first 90 days of account opening is for the Choice Rewards World MasterCard® from First Tech FCU. After the intro period, an APR of 11.99%-18.00% variable applies. You also Earn 20,000 Rewards Points when you spend $3,000 in your first two months.

7. Rewards Visa Card from La Capitol FCU – Intro 0% interest on balance transfers for 12 months on balance transfers, NO FEE

Rewards Visa Card from La Capitol FCU
Anyone can join La Capitol Federal Credit Union by becoming a member of the Louisiana Association for Personal Financial Achievement, which costs $20. Just indicate that’s how you want to be eligible when you apply for the card – no need to join before you apply. And La Capitol accepts members from all across the country, so you don’t have to live in Louisiana to take advantage of this deal on the Rewards Visa Card from La Capitol FCU. The introductory 0% interest on balance transfers for 12 months on balance transfers applies to balances transferred within first 90 days of account opening. After the intro period, a 12.25%-18.00% variable APR applies.

8. Visa® Signature Credit Card from Purdue FCU – Intro 0% for 12 months on balance transfers and purchases, NO FEE

Visa® Signature Credit Card from Purdue FCU
The intro 0% for 12 months offer is only for their Visa® Signature Credit Card – other cards have a higher intro rate. After the intro period ends, 11.50%-17.50% Fixed APR applies. The Purdue Federal Credit Union doesn’t have open membership, but one way to be eligible for credit union membership is to join the Purdue University Alumni Association as a Friend of the University.

Anyone can join the association, but it costs $50. The good news is you can apply and get a decision before you become a member of the Alumni Association.

9. Premier America Credit Union – 0% Intro APR for 6 months on balance transfers and purchases, NO FEE

Premier Privileges Rewards Mastercard® from Premier America CU

Premier America is unique because it has the Student Mastercard® from Premier America CU that’s eligible for the intro 0% for 6 months on balance transfers, though credit limits on that card are $500 – $2,000. There is an 11.25% Variable APR after the intro period. There’s also a card for those with no credit history – the Premier First Rewards Privileges® from Premier America CU, with limits of $1,000 – $2,000 and a 19.00% Variable APR. If you’re looking for a bigger line, the Premier Privileges Rewards Mastercard® from Premier America CU is available with limits up to $50,000 and a 8.45% - 17.95% Variable APR.

Anyone can join Premier America by becoming a member of the Alliance for the Arts. You can select that option when you apply.

Other 0% intro APR cards to consider

10. Visa Platinum Card from Money One FCU – as low as 0% intro APR for 6 months on balance transfers and purchases, NO FEE

Visa Platinum Card from Money One FCU

Anyone can join Money One Federal by making a $20 donation to Gifts of Easter Seals. And you can apply without being a member. You’ll see a drop down option during the application process that lets you select Gifts of Easter Seals as the way you plan to become a member of the credit union. Credit lines for the Visa Platinum Card from Money One FCU are as high as $25,000. After the as low as 0% intro apr for 6 months, there’s a 8.50% to 18.00% Variable APR.

11. Andigo Credit Union – Intro 0% for 6 months on balance transfers and purchases, NO FEE

Visa Platinum Card from Andigo
You’ll have a choice to apply for the Visa Platinum Cash Back Card from Andigo, Visa Platinum Rewards Card from Andigo, or Visa Platinum Card from Andigo. The Visa Platinum Card from Andigo has a lower ongoing APR at 11.65% - 20.65% Variable, compared to 12.24% - 21.24% Variable for the Visa Platinum Cash Back Card from Andigo and 13.65% - 22.65% Variable for the Visa Platinum Rewards Card from Andigo. So, if you’re not sure you’ll pay it all off in 6 months, the Visa Platinum Card from Andigo is a better bet.

Anyone can join Andigo by making a donation to Connect Vets for $15, and you can submit an application for the card without being a member yet.

12. ETFCU's Platinum Rewards Credit Card – Intro 0% for 6 first billing cycles on balance transfers, NO FEE

ETFCU's Platinum Rewards Credit Card
You don’t need to be a teacher to join this credit union. Just make a $5 donation to Mater Dei Friends & Alumni Association. The ETFCU's Platinum Rewards Credit Card has an ongoing APR of 10.25% to 17.95% Variable, so you can enjoy a decent rate even after the intro deal ends.

13. Elements Financial Platinum Visa® Credit Card – Intro 0% for 6 months on balance transfers and purchases, NO FEE

Elements Financial Platinum Visa® Credit Card
To become a member and apply, you’ll just need to join TruDirection, a financial literacy organization. It costs just $5 and you can join as part of the application process. The ongoing APR is 10.99% Variable which is lower than typical cards.

14. Justice Federal Credit Union – Intro 0% for 6 months on purchases, balance transfers, and cash advances, NO FEE

Student VISA® Rewards Credit Card from Justice FCU
If you’re not a Department of Justice, Homeland Security, or U.S. court employee (or a few others), you need to join a law enforcement organization to be a member of Justice Federal. One of the eligible associations for membership is the National Native American Law Enforcement Association. It costs $15 to join.

You can apply as a non-member online to get a decision before joining. And Justice is unique in that the Student VISA® Rewards Credit Card from Justice FCU is also eligible for the intro 0% for 6 months on purchases, balance transfers, and cash advances. So, if your credit history is limited and you’re trying to deal with a balance on your very first card, this could be an option. The APR after the intro period ends is 16.90% fixed.

15. Platinum Visa Card from Michigan State FCU – Intro 0% for 6 months on balance transfers, NO FEE

Platinum Visa Card from Michigan State FCU
There is the option to apply for the Cash Back Platinum Plus Visa Credit Card from Michigan State FCU or the Platinum Visa Card from Michigan State FCU. The Platinum Visa Card from Michigan State FCU has a lower ongoing APR at 9.90% APR - 17.90% variable, compared to the 13.90% APR - 17.90% variable APR for the Cash Back Platinum Plus Visa Credit Card from Michigan State FCU which can earn 1% cash back on all purchases. Anyone can join the Michigan State University Federal Credit Union by first becoming a member of the Michigan United Conservation Clubs. However, this comes at a high fee of $30 for one year.

Are these the best deals for you?

If you can pay off your debt within the 0% period, then yes, a no fee 0% balance transfer credit card is your absolute best bet. And if you can’t, you can hope that other 0% deals will be around to switch again.

But if you’re unsure, you might want to consider…

  • A deal that has a longer period before the rate goes up. In that case, a balance transfer fee could be worth it to lock in a 0% rate for longer.
  • Or, a card with a rate a little above 0% that could lock you into a low rate even longer.

The good news is we can figure it out for you.

Our handy, free balance transfer tool lets you input how much debt you have, and how much of a monthly payment you can afford. It will run the numbers to show you which offers will save you the most for the longest period of time.

promo balancetransfer wide

The savings from just one balance transfer can be substantial.

Let’s say you have $5,000 in credit card debt, you’re paying 18% in interest, and can afford to pay $200 a month on it. Here’s what you can save with a 0% deal:

  • 18%: It will take 32 months to pay off, with $1,312 in interest paid.
  • 0% for 12 months: You’ll pay it off in 28 months, with just $502 in interest, saving you $810 in cash. That even assumes your rate goes back up to 18% after 12 months!

But your rate doesn’t have to go up after 12 months. If you pay everything on time and maintain good credit, there’s a great chance you’ll be able to shop around and find another bank willing to offer you 0% interest again, letting you pay it off even faster.

Before you do any balance transfer though, make sure you follow these 6 golden rules of balance transfer success:

  • Never use the card for spending. You are only ready to do a balance transfer once you’ve gotten your budget in order and are no longer spending more than you earn. This card should never be used for new purchases, as it’s possible you’ll get charged a higher rate on those purchases.
  • Have a plan for the end of the promotional period. Make sure you set a reminder on your phone calendar about a month or so before your promotional period ends so you can shop around for a low rate from another bank.
  • Don’t try to transfer debt between two cards of the same bank. It won’t work. Balance transfer deals are meant to ‘steal’ your balance from a competing bank, not lower your rate from the same bank. So if you have a Chase credit card with a high rate, don’t apply for another Chase card like a Chase Slate® and expect you can transfer the balance. Apply for one from another bank.
  • Get that transfer done within 60 days. Otherwise your promotional deal may expire unused.
  • Never use a card at an ATM. You should never use the card for spending, and getting cash is incredibly expensive. Just don’t do it with this or any credit card.
  • Always pay on time. If you pay more than 30 days late your credit will be hurt, your rate may go up, and you may find it harder to find good deals in the future. Only do balance transfers if you’re ready to pay at least the minimum due on time, every time.

The information related to The Amex EveryDay® Credit Card from American Express, BankAmericard® credit card and Chase Slate® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

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Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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