Credit cards with 0% balance transfers are a way that you, the consumer, can pay off credit card debt and get the credit card companies to work to your advantage if you use the offer effectively. In this section, look for how you can leverage these offers that credit card companies are begging you to take to pay off your credit card debt. This article’s topic:
Pay down a previous debt balance with no interest charges.
Use 0% Balance Transfers to Your Benefit
These promotions for credit cards with 0% balance transfers generally last for about a year. Let’s say that you have a $10,000 balance on a credit card that you are paying a 15% interest rate on. You have been making $500 monthly payments on this card and at the current rate you would pay off the card in just under 2 years. If you transferred your balance and therefore avoided one year of high interest payments while paying the same monthly amount, you would pay off your loan in 8 ½ months or 3 ½ months sooner. That’s a savings of more than $1,500! You would have taken your principle balance down by $6,000 or 60% compared to $4.800 or 48% in that time.
This scenario does assume that the credit cards with 0% balance transfers offer was for only the first year. Sometimes, companies will offer 0% on that balance forever but with much higher rates on all new purchases. This option makes sense when you no longer would need to charge expenses to your credit cards, but are just trying to pay off credit card debt.
This leads me to another example on how to make 0% balance transfers work for you, sometimes it pays to make large purchases with introductory offers from 0% balance transfer cards.