How to Repay Debt with Credit Card Balance Transfers | Savings

How to Repay Debt with Credit Card Balance Transfers

by SammySmith

Clearing debt is never easy however one method is to use 0% Credit card balance transfers. Most cards have an initial transfer rate of 0% that means that once you've paid the initial arrangement charge you incur no other charges providing you repay the debt or transfer the remaining balance somewhere else before the end of the 0% period.

A second significant benefit of repaying debt using a credit card balance transfer is you can change the sum you repay each month to suit your finances. You should always try to repay the highest you can afford so the debt reduces faster however paying a lower figure in certain months is an available option. You may decide to pay less in a month if you require the money elsewhere.

The third major benefit of using a credit card balance transfer to repay debt is that you can prioritize your debts so higher interest debts can be repaid first. Most credit card companies offer a low introductory rate and even a 0% introductory rate so if you are not able to transfer your entire debt to the card you can focus on repaying the other more expensive debts first. This means your debt costs you less over the months.

In order to not incur extra charges you should remember a number of important points when repaying your credit card balance transfer. The first rule is to always pay at least the minimum figure due on time to the credit card company. Failing to make your minimum payment will most probably incur additional charges and will probably end your introductory rate which will then make this type of debt very expensive. Try to make payments before the due date as or missed payments will also incur charges and may result in problems in obtaining credit in the future. If a late payment is unavoidable telephone your credit card company before the payment is due to explain your reasons for the late payment.

Another important rule is to prioritize your most expensive debts first. If you have other credit at a higher rate of interest then it is more expensive you should repay this first to reduce the overall amount you repay. After you have removed higher interest credit then move onto the next most expensive and so on until you are no longer in debt.

Try to repay as much as you possibly can from your debts. Any introductory rate on the credit card transfer won't last forever and the quicker you repay the balance the faster you can forget it. Try not to add additional spending to the balance transfer as this will incur higher interest charges than the original debt and will not be repaid first.

Try to get a credit card with the longest introductory period possible and make a note of when this expires. As the date approaches search for another card company to transfer any remaining debt to. Look at any existing cards you have as these may have special offers available. If you get rejected simply apply to an alternative company offering introductory balance transfer rates. Move any outstanding balance automatically and make sure you cut up your old card so you cannot spend on it. You'll pay a transfer fee for the new card but this will almost certainly be lower than the interest on an existing card.

Make sure you define a budget and avoid credit cards for new purchases. If you continue to spend money via easy credit you will eventually face painful bankruptcy procedures. Depending on the size of your debts it is possible to repay them using this method. Remain positive and avoid any additional spending on credit, it may take a while but you will eventually be free of debt. I was in debt for several years before successfully using this method to clear my debts and live a live free of debt.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

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