Unfortunately, saying you want to get out of debt is easier than actually doing it. If you’re serious about ending problems with credit card debt, you’ll need a plan that you can stick to. One way to do this is through a balance transfer credit card. It is made specifically to help you pay off a lingering balance. Here’s how to use a balance transfer credit card to get out of debt.
Study your Situation
In most cases, racking up high credit card balances does not happen overnight. Just like weight gain, debt can grow slowly over a period of time. So if you’re ready to tackle a high credit card balance, you probably need to consider a lifestyle change. Think about how you got to this point, and what you can do in the future to avoid debt problems.
One way to do this is to sit down and take an account of all of your finances. Look at how much you owe. You may want to talk to a financial advisor or debt counselor about your situation. Once you understand what you need to pay, you’re ready to set up a solution for it.
The Balance Transfer Plan
You may have seen advertisements for balance transfer credit cards. These cards let you bring over a balance from any of your credit cards. They then give you a period of time, ranging from six to twelve months or more, to pay off the balance, interest free. This gives you time to focus on paying off the money you owe. Think about it: every payment that you make will go directly toward paying off the debt, rather than interest. Sound like a good plan? It is.
Check the Fine Print
While a balance transfer credit card can be a great option, you’ll want to make sure that it really can help you out. So before you apply for one, check for any hidden fees. Some cards charge a fee for bringing over the balance. This charge may be capped at a certain amount, or it may not be. You’ll want to make sure that you don’t pay a large fee for bringing over the balance, as it would cancel out the savings you’ll receive.
Also check to see what the 0% APR refers to. In most cases, the 0% APR is only applied to the transferred balance. This means that if you use the card for other purchases, a separate, higher interest rate will be applied to them. Your payments will first go toward the new balance, and then the transferred one. To be safe, you’ll want to avoid using the card until the transferred balance is paid off.
Whatever you decide, keep in mind that getting out of debt is a lifestyle change. The balance transfer credit card can be a useful tool to help you climb out of debt. The rest, then, is up to you.
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Article Added on Sunday, February 1, 2009
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