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Look, life happens and sometimes we bite off a little more than we can chew. If you’re in debt, especially with credit cards, there’s a 99% chance you couldn’t afford whatever it was you were swiping for. Instead of quitting while you were ahead, you kept making bad decisions so now you’re in a ‘bad’ situation. I know, I’m in one too.
After deciding that I was no longer interested in borrowing money for my belongings, I extinguished the fire from my credit cards and got serious about my payoff plan. After the smoke cleared, I was left with nearly $5,600 in damages and for a 21-year-old college student with little income that amount felt 4x greater. I had begun taking a small portion out of each paycheck and applying it to my debt, but the balance wasn’t moving as quickly as I had hoped for.
After doing a little research, I came across an article suggesting I use a card with a 0% Intro APR. To be honest, I didn’t understand the credit card jargon but I was already way over my head so what could it hurt? It turned out that it was the BEST decision ever.
Why should I want a 0% APR?
I know what you’re thinking. You have enough credit cards so why do you need another one just because of an Intro APR?
Let’s say you carry a $3000 balance on your credit card, and the APR is 18%. Considering that you maintain the same balance, you will wind up paying $540 in interest alone! If you make $100 payments to your credit card each month, it will still take you 40 months, or over three years, to pay it off! Uh-uh, honey!
If you were using a card with a 0% APR that $540 could have gone towards your total balance, thus helping you knock it out faster. Get it now? *Cue the angels singing*
Apply for a credit card with a 0% Intro APR
This first step is a no-brainer.
If your credit score is around a 670 or above then you will qualify for most cards.
Do a balance transfer for all other accounts
To really maximize the benefit of using a 0% intro APR, consolidate other balances with a balance transfer. Balance transfers will normally have a small fee or interest rate of around 3-5%. Let’s say you’re transferring a $2000 balance with a 5% fee. That means you will have $100 added into your existing balance. Some cards may offer no fees and 0% on transfers, but not many.
Attack your balance like a maniac
Once you’ve got your balances transferred, be sure to make note of when your APR will change. Create a plan of action to keep track of where you want your balance to be by the end of the introductory period and the monthly payment required to get there.
Keep in mind that once the introductory rate is over you will begin accruing interest on your remaining balance, which can range from 13-25%. This increases the time it will take to pay off your debt be sure to attack from all angles. Throw nickels, dimes, and pennies!
Transfer out your remaining balance to another card with 0% Intro APR
Sometimes things happen and you aren’t able to pay off all of your debt before the introductory rate ends and that’s OKAY. I was not able to get to a $0 balance after my Intro rate ended, so I transferred my funds over to a new card. Use this option very carefully.
You are able to continue making interest free payments. With a larger overall credit limit, your credit utilization will be better (as long as you don’t run it up) and can help to strengthen your credit score.
If this step is not used correctly, you could wind up in an even bigger mess than before. With a new card, you now have more available funds to ‘borrow’ and it can be tempting to swipe. If you let it get the best of you, you will now have yet another account to keep up with and more debt to pay off.
In less than a year I’ve been able to pay off more than $3000. Considering that my income is pretty small, and some months I was barely able to pay more than the minimum, this is a huge advantage!
Credit Cards I Have Used and Recommend
This card has no annual fee and a 0% Intro APR for 14 months on purchases and balance transfers before switching to 11.99% to 23.99%. You can earn 5% cashback on rotating quarterly categories, and 1% cashback on all other purchases.
Use my link and get a $50 Cashback Bonus or 5,000 Miles when you make your first purchase within three months!
This card has no annual fee and a 0% Intro APR for 15 months on purchases and balance transfers. After the introductory period, the APR changes to 15.99%, 21.74% or 24.74%. You will earn 1.5% cash back on every purchase.
Balance transfer fee: $0 Intro balance transfer fee within the first 60 days, then 5% of the amount transferred.
American Express Blue Cash Everyday
I’m currently using this card to pay off the remainder of my balance. It has a 0% Intro APR on purchases and balance transfers for 12 months before switching to 13.99%-24.99%. You can earn 3% cashback at supermarkets, 2% cashback at U.S. gas stations & select U.S. department stores, and 1% cashback on all other purchases.
Balance transfer fee: $5 or 3% of the amount of each transfer