How to Use Balance Transfer Cards to Get Out of Debt Fast (and My Top Recommendations)
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If you know the feeling of crushing credit card debt, this one is for you.
It's a crappy feeling reviewing your statements each month only to see a huge balance staring back at you.
Even worse is seeing those interest charges pile up, knowing there are better things you could be doing with that money.
Instead, your reaction might look similar to this:
Some people rack up credit card debt when they start a business, help family members with large purchases, or face unexpected medical expenses that aren't covered by insurance. All of which are slightly more understandable.
At the same time, though, there are plenty of people who find themselves spending too much on random purchases they just "had to have."
If you fall into either one of these scenarios, this strategy can help.
Your situation won't change overnight, but you can make major headway on paying down those bills using credit cards.
I know it may sound odd but credit cards can be a powerful tool to help pay down debt.
By signing up for a balance transfer card, you are essentially being approved for an interest-free loan for a period of time. During this intro period, you get to take a break from interest charges and make payments toward the principal amount of debt.
It's like hitting a freeze button on interest rates.
A question I get a lot when I pose this method is:
"Why would a credit card company want to do that for me?"
Some cards charge a 3 percent fee on the amount you transfer to the card, outside of a potential promotional transfer period (but each card differs). While credit card companies make money from the fee, you still get the peace of mind you're looking for with interest-free payments and the extra time to pay down your debt.
Another reason they're willing to give you a "free loan"?
They really hope you will remain a customer for years to come after the promotional APR period is over. This is a great thing for both you and the credit card companies (imagine that!) as long as you continue to make payments on time and steadily pay down debt.
If it's possible, paying off your complete balance during the intro 0% APR period means you will never pay a dime in interest.
Here's my list of top balance transfer credit cards and why I recommend them.
Not only is the Blue Cash Everyday® Card a great choice for balance transfers, it's a powerhouse cash back credit card as well.
Starting with 15-months of interest-free payments on both balance transfers and purchases, you can also earn $150 bonus after spending $1,000 in the first three months of opening your account.
It does have the standard balance transfer fee (3% or $5, whichever is greater) but if you earn the bonus, it can help cover the fees from your transfer.
You'll also get 3% cash back at supermarkets, 2% cash back at gas stations and select department stores, and 1% back on everything else – all with no annual fee.
Considering the combination of an incredible 0% APR intro period and its cash back perks, this value of this card is top-notch.
There's a lot to like about the Chase Freedom Unlimited besides its generous zero interest intro period.
You can enjoy 15-months of 0% interest on both balance transfers and purchases, along with unlimited 1.5% unlimited cash back.
The icing on the cake with this card is that there's no annual fee and no minimum necessary to redeem your cash back rewards.
Similar to the card above, the Chase Freedom also offers 15-months of 0% APR on both balance transfers and purchases.
The main difference is in its cash back rewards system. With the Freedom, you can activate certain bonus categories each quarter to receive 5% cash back (up to $1,500 in combined purchases). Definitely higher than the Freedom Unlimited, but you'll need to remember to activate the categories each quarter in order to earn.
Some previous bonus categories have included gas stations, grocery stores, Lyft, and more. For all other purchases, you'll earn 1% cash back.
The Barclaycard Ring® Mastercard® is a unique balance transfer card that offers 0% interest for 15-months on balances transferred within the first 45 days of opening an account.
There's no annual fee to worry about, and the low ongoing APR makes it a popular choice for someone looking for a balance transfer card.
Please stop paying interest on your debt if you don't have to!
It's an obvious plea, but something I see people struggling with often.
You're already off to a good start by learning how others have paid off debt using credit cards, now it's your turn.
Once you realize credit cards can actually help you get out of debt when used properly, it's one of the easiest and fastest ways I've seen people escape credit card debt.
Disclaimer: This content and the opinions expressed here are the author’s alone and have not been provided, commissioned, or endorsed by the credit card issuer. All information was accurate at the time of this post but card terms and conditions may change at any time.