0 Balance Transfer Credit Cards

The great thing about 0 balance transfer credit cards is that you get “free money”. Even though this sounds extremely tempting to go and spend even more, the real benefit is to use this to your advantage to help you get ahead financially. Credit card debt can catch up with you really quickly and the thing is that it usually bites you in the ass if you are not a good money manager.

Suppose you have an 2 existing credit cards and you owe $1000 on each. Your minimum monthly repayments are $200 a month and that is just to avoid penalties and charges. If you just keep making the minimum payments then you will probably never get out of debt because you are not paying off the principal amount. This is exactly where 0 balance transfer credit cards come in.

When you get a 0% balance transfer card, you can roll the debt from both the old cards into your 1 new card. Then cancel both the old cards. Now you’ve got 1 card and by simply making your normal $200 a month repayments you will actually pay off the principal instead of just paying to avoid penalties and changes.

The main problem with 0 balance transfer credit cards is that there’s a limit on the time they offer you the 0% interest. Some cards offer it for as long as 18 months, but the standard time frame is usually 6 to 12 months. You have to take very careful note of the time frame because when its over you will automatically revert to the original and full monthly APR. The catch is that these 0% cards are usually quite high simply because the banks need to make their money back.

Focus on making as many payments as possible during this “free” period as it will reduce your debt significantly. If however you can’t make a serious enough dent in your credit card debt, then what you can do is to be a “credit card tart”. Basically it involves switching from one 0 balance transfer credit cards to the next and just rolling over from one offer to the next to maintain the 0% interest.