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How to Help Pay Down Debt with a Balance Transfer

Did you know you can help consolidate and eliminate debt with a credit card balance transfer? There may come a time when you realize that your credit card debt is way higher than you are comfortable with. This means it is time to focus, find some discipline and pay off those balances, before things become truly out of control and you find yourself in financial hot water.

When your credit card charges a high interest rate, it can be difficult to make significant progress each month, since you are accruing interest rapidly and only part of your payment is applied to the principal balance. This means it will take you far longer to pay off a large sum!

One way to help solve this problem is to take advantage of a 0% APR balance transfer for a credit card that you won’t have to pay any interest on for a period of time. Obviously, the longer the introductory rate goes on, the longer you will have to pay off the debt without having to pay any interest. So, start your search by looking for cards that offer extended 0% APR introductory rates.

But—be careful, because there may be other details to consider and you must read the fine print carefully to make sure you know exactly what the terms and conditions are.


Check Your Mail!

Chances are, you have been receiving offers in your mailbox for 0% APR credit cards that offer balance transfers. Take a look at these and evaluate the following factors:

  1. How long does the introductory rate last?
  2. What will the interest increase to when the introductory period ends?
  3. What are the balance transfer fees?
  4. Are there any penalty fees?
  5. Is there an annual fee?

Each of these things may be a little different. You want to pick the card with the best combination—the longest 0% introductory period, the lowest balance transfer fees, the lowest (or no) annual fee, and the fewest restrictions and penalties. Not all cards are created equal, so read carefully!

Be Smart About Paying Off Your Debt

Most experts would recommend that you attempt to pay off your entire credit card debt without paying substantial interest. Since you get nothing for that interest (other than the opportunity to borrow the money), it is not a great way to spend your money. In order to make the most of your 0% APR credit cards, you should make minimum payments on those and put everything you can onto your higher interest rate loans and credit cards to pay them off more quickly.

However, unless you pay off the balance transfer on that 0% APR credit card, you will be surprised to discover how quickly you start accruing interest once that introductory period ends. At that point, you have not really gained much or saved much money, because, as you recall, you paid a balance transfer fee to use the 0% APR card!

Be a Better Money Manager

Here is a quick example that helps to illustrate how a 0% APR credit card can help you pay off debt. Let’s say that you have $500 per month to allocate for credit card payments, and you currently owe $9,000 in credit card debt, the combined total of three separate cards. Here is what your payoff schedule could look like:

  • Card #1: Balance $2,500, APR 14.99%
  • Card #2: Balance $2,750, APR 19.99%
  • Card #3: $3,750, APR 13.99%

Your total credit card debt is $9,000. The best course of action is to apply for a 0% APR credit card with an 18-month introductory period. Let’s say, for example, that you are approved for a $5,000 credit line, with a 3% balance transfer fee ($150). You will transfer the entire balance of Card #2, because this is the highest interest rate. You will also transfer $2250 from Card #1, so that you now have $5,000 in credit card debt that will not accrue any interest.

Here’s what your debt now looks like:

  • Card #1: Balance $250, APR 14.99%
  • Card #2:  Balance $0
  • Card #3: Balance $3,750, APR 13.99%
  • Card #4: Balance $5,000, APR 0%

So, as you can see you still have $9,000 in debt. Remember, you have $500 per month to put toward paying off your credit cards. Here’s the plan:

Focus on paying off Card #1 first, as this is now your highest interest rate. Make the minimum payments on Card #3 and Card #4 (these will likely be approximately $75 and $100). This leaves you with $325 per month to put toward Card #1 and Card #3, which will allow you to payoff Card #1 during the first month, and you will not pay anything in interest charges.

Once Card #1 is paid in full, then you will have $400 to put toward Card #3. After paying $175 for one month, the balance will now be approximately $3,575. In 10 months, you will be able to pay off that credit card in full, and you will have paid approximately $220 in interest charges.

All that is left is Card #4, which will have a balance of $3,600 after making minimum payments for the previous 11 months. You still have 7 months left in your introductory period, so making a monthly payment of $514 will allow you to pay the balance in full, without paying any interest.

By using the 0% APR credit card for 18 months, you have paid $150 in balance transfer fees and paid approximately $220 in interest. Had you stuck with the original credit cards you had, you would have paid nearly $900 in interest during the same period of time.


By using a 0% APR credit card wisely, you can certainly pay off your debt more quickly, and save yourself a considerable amount of interest in the process. Right now, Discover it® – 18 Month Balance Transfer offers one of the best 0% credit cards out there. With no annual fee, no penalties, and a 0% APR on purchases for 6 months and balance transfers for 18 months, you really can’t go wrong!