You may transfer your way out of credit card debt
Low-rate balance transfer credit cards offer a way out
By Ben Woolsey
Once you get credit card debt, it can be challenging to become debt free. That's just a fact. As much as credit cards provide convenience, they can lead to disastrous financial results. But it doesn't have to lead into bankruptcy. There are ways that you can reduce debt from your credit cards and transferring your way out of credit card debt is an option you might not have considered.
The best way, of course, is to pay off your credit cards in full every month. This may be a little simplistic, but it's really the only way to be debt-free. You can avoid interest charges and finance charges by doing this. None of the following major credit card companies penalize you for doing this.
It all comes down the old adage of: live within your means. In other words, spend less money than you make. By applying this adage to credit card spending, it is a sure-fire way to stay out of credit card debt.
But what if you’ve accumulated credit card debt already? If you have outstanding balances on high interest credit cards, then you might consider doing a balance transfer onto a lower interest credit card.
Credit card debt is one of the most stressful situations a person can be in. You are stuck in a situation in which you are paying money every month on a debt that you can't pay off. It's like trying to dig yourself out of a hole while someone at the top is filling it up. There are ways you can start to dig yourself out of the hole of credit card debt.
There are three options you may want to consider to start getting yourself out of credit card debt.
- Transfer your balance to a lower-interest credit card. Visa, MasterCard, American Express, and Discover have a variety of different cards. Some have higher interest rates, while others have lower rates. By transferring your balance to a card with a lower interest rate, you can save hundreds if not thousands of dollars in interest charges. You can compare these cards online.
- Transfer your balance from a high interest card to one with a low introductory interest rate. You probably get these in the mail all the time. Limited time offer! Pay no interest for 6 months! 0 percent till next May! All of these cards offer an introductory low APR (sometimes 0 percent) when you get their credit card. Be careful if you use this option. Use it only if you plan to pay off the balance BEFORE the grace period ends. If not, you might end up paying more than you would have originally.
- Get a credit card debt consolidation loan. This option can take a lot of the stress out of trying to juggle credit card accounts. You can consolidate all your credit card debt into one easy payment at a fixed interest rate. This rate is almost always lower than the one the credit card companies will give you.
Any of these three options can work for you. You just have to decide which route you want to take to move toward a debt-free existence.
Published: July 15, 2005
- How to avoid 5 traps of balance transfer cards – Paying late and not erasing your debt can be costly mistakes ...
- How to ask the kids to help out in a financial crisis – When finances are suddenly stretched, is it wrong to solicit help from your children? ...
- Talking about your debt can help you escape it – Secrecy and shame can hurt efforts to become debt-free ...