Transfer Your Way out of Debt
Are you in debt? One solution to your troubles might be to move your current balance to a card that offers less fees and interest rates. Below, you will be acquainted to the ins and outs of relieving your debt.
What is a Balance Transfer?
When you transfer your balance, you are using another credit card to pay for an already-existing credit card debt. On average, the interest rate on these transfers is about three percent and, unlike your loans, has no grace period.
There may be some hope, however, if you’re using the right card for your transfer. Today, most banks offer cards for the exact purpose of transferring credit, which offer lower interest rates as well as special offers that work to not put you further in debt. Many of these inventions offer a lower Annual Percentage Rate (APR), which lets you focus on paying off what you must already pay.
What to Look for in a Balance Transfer Card
Introductory Offers – Low APRs for a year or more.
Balance Transfer Fees – The lower, the better.
Post-Introduction Periods – A card that can be used after your debt is paid.
Apply if: You want the longest-available time with 0% APR, as well as a credit card that can still function after the introductory period.
The typical scenario of using a balance transfer card often works as follows: you apply for the card, you use the card, and then the object becomes a thing of the past more quickly than it became a part of your financial life.
With the Discover it® card, that is not the case. After your debt is paid, the Discover it actually becomes a cash back credit card with plenty of rewards. It offers 5% cash back on special offers that rotate quarterly, as well as 1% cash back on all other purchases. In addition, it also gives you the option of free monthly credit scores, as well as no fees on foreign transactions.
Although its 10.99% APR and long introductory period might seem like a godsend, make sure to note that there becomes a balance transfer fee of 3% after the first 18 months. In all, the Discover it® is something that can be more to you than a piece of plastic in your pocket.
Apply if: You want to avoid balance transfer fees.
The Chase Slate® is a balance transfer card that offers the nice, long introductory rate of 0% APR. For up to fifteen months, you can focus on paying off your debt without having to worry about paying more than you initially planned. Also, there is no balance transfer fee for the first two months you put the card to use.
After the introductory period, however, the Slate® becomes a less-than-useful credit card. Offering no perks or cash back, its APR jumps to 22.99% after the first two years. Also, Chase does not allow you to transfer balances between its cards, which means you cannot use the Slate® if you are trying to reduce the debt from an already-active plan with Chase.
Apply if: You want a credit card with low interest rates, after you pay off your debt.
Even if you pay off your debt, you might still be at risk for accruing the silent menace in the future. To lessen your odds, you might want to apply for the U.S. Bank Platinum Visa. Like most balance transfer cards, it offers a 15-month introductory rate of 0% APR. Afterward, its annual percentages remain lower than its competitors, sometimes as low as 9.99%.
Beware, though, because not all cards carry that low yearly rate. With some, it can rise to over 20%. On the whole, however, the U.S. Bank Platinum Visa is a card that will prevent you from going back into the dark depths of debt.
Barclaycard Ring® Mastercard
Apply if: You never want to see a fee attached to your balance transfer.
Balance transfer fees can strike fear in hearts of many, especially in those already struggling with their finances. If you don’t want to see those higher numbers, the Barclaycard Ring® Mastercard may be the ideal choice for you.
On the downside, the product, unlike others, does not offer any introductory rates. Instead, it holds a steady 8% APR from the time it is activated. Still, the percentage is lower than that of other cards, and can keep you from paying twenty or more percent than your original balance. If you find you are beginning to run a balance on another source of credit, you can transfer it to your Barclaycard Ring® Mastercard for no cost, ever.
While this card may be something you would want to use forever, remember it is important to pay your debts as soon as you are able.
PenFed Promise® Visa Card
Apply if: You need a long time to get rid of your debt.
If you are lost in a mountain of debt, the PenFed Promise® Visa Card may be a worthy solution to consider. Offering a low intro APR of 4.88% for four years, as well as no transfer fees, it gives you plenty of time to get rid of the source of your stress.
The downside is that, to qualify for this card, you must be connected in some way with a military service member or a government employee. If you are not, you must pay twenty dollars in order to become a member of an organization that makes you eligible.
