Get out of Credit Card Debt (and Stay Debt Free)

Get out of Credit Card Debt and Stay Debt Free For better or worse, plastic has become the American way to pay for just about everything. After all, using credit cards is a great convenience and with the right card you can even get some fantastic rewards. However, for many people credit cards can lead to financial disaster.  Credit card debt is the easiest type of debt to get into and among the hardest types of debt to shed, as high interest rates and alluringly low payment requirements make it easy for people to wind up in over their heads.

Here are some ideas to help you get out of credit card debt and avoid falling back into debt in the future:

Use Balance Transfers to Reduce Credit Card Debt Costs

If you already have credit card debt, 0% balance transfer offers can play a huge role in helping you to get out of debt. With a 0% balance transfer, you can move your high interest credit card debt to a card that charges no interest for anywhere from six months to a year or longer.

During the course of a 0% balance transfer, you pay no interest on your current debts. This means all of your payments go towards reducing your credit card debt. This will not only save you a good deal of money on interest – sometimes as much as $120 a year for every $1,000 of debt transferred from a card with a 15% interest rate – but it will also help you get out of debt sooner, since money you would otherwise be wasting on interest payments will instead be used to reduce your credit card debt.

Figure out Where Your Money is Going

Once you’ve stopped interest from piling up by taking advantage of a 0% balance transfer, it is time to focus your attention on managing your money more effectively. Money management does not have to be difficult, but it does take some time and some diligence.

If you want to avoid taking on new credit card debt, your best defense is to manage your money wisely and that means setting up a monthly budget. This will help you figure out how much money you have coming in and where that money goes. It also means taking control of the urge to overspend.

Once you have a budget in place and you know what you can afford for groceries, clothing, eating out, etc, stick to it. Cut down on non-essentials and try to dedicate as much money as possible to repaying credit card debt.

Manage Your Credit Cards Wisely

The combination of a low rate balance transfer and a budget will help you get started, but if you don’t manage your credit cards wisely, you may find yourself struggling with credit card debt for years. One way to avoid this is to budget as much money as you can to repay credit card debt. This may mean cutting back on travel and entertainment, but in the long run, becoming debt free – and shedding monthly interest expenses – will free up more money for you to enjoy life in the future.

The key trap to avoid is running up new debt or not paying back enough while you are under the umbrella of a 0% rate. While it may be tempting to pay less when your monthly credit card payments get smaller, this mistake can significantly extend the time it takes you to get your credit card debt down to zero.

Is It Really That Simple?

The combination of a 0% APR balance transfer and a focused budget can play a huge role in reducing credit card debt and putting you on the path to a debt free life. However, the most important ingredient is will power. Without a firm commitment, 0% rates and a good budget won’t solve your problems. Stick to your budget, live below your means, and put as much money as you can towards credit card payments and you’ll be surprised how effective this approach can be.

For additional information on credit cards that offer 0% interest rates for up to two years, please see the 0% APR balance transfer comparison section of SmartBalanceTransfers.com.

About the author

Jeff Weber

Jeffrey Weber has been following and blogging about the credit card industry since 2004. He has also written for Forbes and been cited in a wide range of major media outlets including USA Today, Time, MSN Money, The Christian Science Monitor, The Detroit Free Press and numerous other prestigious online and print publications.

Jeffrey resides in Easton, Connecticut and enjoys spending his free time chasing after his two year old son, watching films with his wife and occasionally taking a holiday to go snorkeling.

– has written 338 posts.

{ 4 comments… read them below or add one }

Cliff February 17, 2011 at 2:08 pm

I have 2 questions regarding the effects of applying for balance transfer cards:
1) Can applying to a BT card cause the current rates on my other existing cards to go up?
2) If my income has go down significantly since the last time I applied for a CC, could reapplying for a BT card cause APR% changes to my existing CC account?
Thanks for your advice!

Reply

Jeff Weber Balance Transfers Helper February 18, 2011 at 11:24 am

Cliff,

Your current credit card companies cannot raise the rates on your existing balances. They can raise rates on future purchases, but that is a risk worth taking if you can get a 0% rate as opposed to one in the teens.

Reply

Jeff Weber Balance Transfers Helper January 31, 2011 at 3:59 pm

Don’t be discouraged RJ. You may need to do some serious cutbacks in regular spending to get balanced, but getting rid of your debt will help get your finances in order, since you’ll gradually have smaller and smaller credit card payments. And if you smoke, now we would be a great time to quit. That would more go a long way in closing the gap.

Reply

Jeff Weber Balance Transfers Helper February 1, 2011 at 9:59 am

Maury,

Generally, you’ll need good credit with no late payments in at least the past year. Banks have been pretty eager to get new business and it is not nearly as hard to get a credit card today as it was this time last year.

Reply

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