Paying down a hefty credit card balance is hard enough. Trying to do so quickly, without hurting your credit, and while paying the least amount of interest possible may seem like a herculean feat. However, finance experts have found a way to do just that.
If you’re struggling to reduce your balance, this legal method is the quickest way to pay off $10,000 in credit card debt.
First Step: Stop The Interest
While the debt on your credit card is a serious issue, the interest is what’s preventing you from paying it off. Using the sum of $10,000 as an example, if you paid $200 monthly payments on that debt, $150 of that payment would go straight to interest. Luckily, you can use promotional offers from credit card companies to stop the interest in its tracks.
Look for a credit card issuer that offers “0 percent intro APR balance transfer”. Some cards are willing to offer new customers over 20 months’ worth of no interest – the longer the period, the better! But it’s crucial that the 0 percent interest rate extends to all balances transferred to it.
Below we’ve detailed some credit cards that have the lengthiest 0 percent introductory periods. Many of them also charge little to no fees. Shifting your balance to one of these options can help you move on to the next step.
Second Step: Maximize Your Payments
Now that you’ve transferred your balances, your interest fees are mercifully on hold. Here’s the cathartic moment you’ve been waiting for, as you can finally chip away at your balance without paying any interest! Every cent of every payment you make will go toward decreasing your debt.
Let’s revisit that $10,000 example. Transferring that sum onto a credit card with 0 percent intro APR for 15 months and no transfer fee, your $200 monthly payments could reduce your debt to $7,000. If you could swing making $300 monthly payments, your debt could be down to $5,500. That’s almost half of your debt erased!
How much would you reduce your balance over that time period without transferring it to the interest-free card? You’d pay off $850. That’s right: your debt would still be $9,150, despite paying the same payments of $200 per month.
Best 0 Percent Intro APR Balance Transfer Cards
Now that you understand how these cards can make all the difference in your battle against debt, let’s review some of the best 0 percent intro APR balance transfer credit cards.
Keep in mind that some of these cards may restrict how much balance you can transfer from another card. Some may allow balances of $10,000 or higher, but others may limit the amount. It’s best to read all of the fine-print before you commit to any of these options.
Citi Diamond Preferred Card
No credit card company offers longer 0 percent intro periods than Citi, which is why it leads our list. This card allows you to get 0 percent intro APR on balance transfers for 21 months! Keep in mind that your credit has to be in tip-top shape to be approved for this card.
That extra interest-free time could help you make a serious dent in your debt. Going back to our $10,000 debt example, you could reduce your balance by $4,200 by making $200 monthly payments with the Citi Diamond Preferred Card. Plus, Citi offers a wealth of partnership deals and promotions on entertainment and dining.
Discover it Cash Back Card
This Discover it card’s specialty is right in the title: Cash Back. Offering higher cash back rates in specific categories, Discover allows you to redeem those funds in gift cards, Amazon purchases, instant eCertificates or even charitable donations. As a welcome bonus, Discover even matches the cash back you earn in your first year, dollar for dollar.
On top of those perks, the Cash Back card offers 0 percent intro APR on purchases and balance transfers for 15 months. (Afterwards, it adjusts to 16.24 percent – 27.24 percent variable APR.) The lengthy interest-free period, combined with huge cash-back savings, makes this card an attractive option.
Discover it Balance Transfer Card
The Discover it Balance Transfer card has many of the benefits of its Discover it Cash Back card. Both feature $0 annual fees as well as 5 percent cash back on rotating bonus categories that change each quarter.
However, the card’s balance transfer leniency is the real focus here. Discover offers 0 percent intro APR on purchases for six months, and 0 percent intro APR on balance transfers for 18 months! (Afterwards, it likewise reverts to 16.24 percent – 27.24 percent variable APR.)
Tackle Your Debt Now
Transferring your balance to an accommodating card can help you dig yourself out of debt. Most credit card issuers promote at least one attractive balance transfer option. Heck, Citi offers about five on its own! So, it’s wise to shop around and find the best solution to reduce your debt.
While a balance transfer can boost your credit score by helping you pay less interest, you should avoid making this a habit. Repeatedly opening new credit cards and transferring large balances to them can negatively impact your credit score. In any case, it’s a good idea to speak with your financial advisor before transferring enormous sums.