0-percent intro card buys time to pay debt

Have a plan to use that interest-free period wisely


Credit Wise
Credit Wise columnist Kevin Weeks
With more than 20 years experience in the nonprofit credit counseling industry, Kevin Weeks joined the Financial Counseling Association of America (, @TrustFCAA) as its president Dec. 1, 2014. Weeks has extensive knowledge of both the credit counseling industry and the FCAA organization, having served in leadership positions for three of its member agencies and on the FCAA board of directors. In addition, Weeks is working with FCAA members to help develop a long-term solution to the student loan crisis through the website Weeks holds a bachelor of science degree in business administration, management information systems from Salem State University.

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Question Dear Credit Wise,
I have 0 percent credit cards for 18 months, and higher interest cards. I am trying to decide if I pay minimum on the 0 percent card and higher amounts on others. My goal is to pay off all debt as soon as possible. -- Nancy


Dear Nancy,
I like your goal -- paying off all debt as soon as possible. That's always my first and best advice, so you and I are definitely on the same page. Let's talk about the best way to accomplish that goal.

The first thing I would say to you is to stop using your credit cards. You may have done this already, but just in case you have not, now is the time. If you must use a card for any reason, be sure that you can afford to pay that charge off in full by the time the bill is due the next month. This would be in addition to whatever amount you have decided to pay on that card. For instance, let's say you have a $500 balance on one of your cards and you have decided you will pay $50 a month to that card every month until it is paid off. If you use that card and charge $35, the next month you will need to pay $85.

You have some options when deciding how much to pay to each of your creditors. It is most economical to target your highest interest cards for extra payments. The sooner you can pay off those cards, the better for your bottom line. However, some people with many cards may decide to pay off the cards with lowest balances first just to get them out of the way.  This is totally up to your preference -- choose the method you think will make you stick to the plan.

You will need to look at your budget and determine the total amount you can afford to pay each month toward your debt.  Allocate that amount until your total debt is paid in full.  As soon as one card is paid off, the amount you have been sending to that card will be added to another card's payment each month.  This is called the "snowball" method of paying off debt.  Just like a snowball, you will roll through your debt.

However, I want you to be careful with your 0 percent card. Since that card's rate is only good for 18 months, you need to be sure that you don't miss out on the advantage of that rate. You can start for now as you suggested and pay just the minimum on this card while you add more to the higher interest cards. But pay attention to the dates and be sure you have paid this card in full by the time the 18 months are up.

Be wise with your credit!

See related: Your first budget in 3 easy steps

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Published: January 9, 2016

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Updated: 10-25-2016

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