Is A Balance Transfer A Good Idea For Debt?

July 26, 2024 By: Stephanie H. - CreditMonarch Online Writer0 comments

Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

When you’re paying a significant amount in interest, it can feel like an impossible burden to remove from your credit card debt. Using a balance transfer credit card, you can temporarily put a hold on the crushing interest charges. By moving the debt to a balance transfer credit card with a 0% APR promotion, you won’t pay any interest for the 0% term, which can be as long as 21 months.Transferring a balance to a new credit card is not the entire process, however. Once the debt has been relocated, it’s essential to be disciplined in paying it off before the promotional window closes and interest charges begin on the remaining balance.

The first step is to identify the length of the 0% period, which is typically listed in months. Next, divide the total balance transfer amount by that number. The outcome is what you’ll need to pay monthly to pay off the balance before interest starts accruing. Make a list of all your debts and figure out which ones you will pay off first. Paying off the debt with the highest interest rates first is a method that can be used, which is also known as the debt avalanche method. This can save more money in interest over time compared with using the “debt snowball” method, in which you pay off the smallest debt first regardless of the interest rate.

While you’re trying to pay off your credit card debt, it’s smart to refrain from taking on any new debts or putting yourself in a deeper hole. It’s possible that some bills are unavoidable, but it’s a good time to delay major purchases you’d normally pay for with a credit card.

Credit card debt can be easy to fall into, and it can be difficult to get out of it. Make a plan to pay more than the monthly payment that is required by your card. You won’t be able to use another credit card to do this unless you do a balance transfer. If you have a large balance, prioritize paying it off as soon as possible. The more time you spend on paying off a balance, the more money it will cost you. Here at CreditMonarch, we believe these are the best balance transfer credit cards in helping you pay off your credit card debt in July 2024.

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