Recently, I had lunch with a fellow writer, and naturally the subject of credit cards came up. But contrary to my affection for these products, this travel and adventure writer had all the excitement he could stand. He had cancelled all of his cards, and was working on paying the balance off of the last one. In short, he needed my help.
What I recommend
First, it is important to realize that there are a lot of people in his position. Various statistics have shown that between one half and two thirds of all households with credit cards will carry a balance. Credit card debt is expensive as it is unsecured debt that carries a high interest rate and is never tax deductible.
So the goal of every credit card user with debt should be to pay it off as soon as possible in order to avoid costly interest charges. And while many books have been written about this subject, it all boils down to two steps.
Step 1: Create a budget
Those who are in debt should take the time to calculate their income and expenses in order to come up with a plan to pay off their credit cards as soon as possible. Just like loosing weight is all about diet and exercise, paying off debt is all about minimizing expenses and maximizing income.
Step 2: Obtain a credit card with a 0% APR balance transfer offer
The next step is to temporarily eliminate interest charges by opening a new account with a 0% promotional balance transfer offer. These days, the biggest problem is finding the best offer. Most cardholders should start with the Slate card from Chase, as it is the only product that features 0% APR balance transfers with no fee. In fact, cardholders receive 15 months of interest free financing on both new purchases and balance transfers for 15 months, and there is no balance transfers fee.
Another card worth considering is the Simplicity card from Citi. It features 18 months of interest free financing on both new purchases and balance transfers, but with a 3% balance transfer fee. There is no annual fee for this card. This card may be the best choice for those whose debt is on a Chase card, as no bank will allow balance transfers between cards that it issued.
You don’t have to be an expert on credit cards to get a handle on your credit card debt. By creating a budget, and performing a balance transfer, your debt will disappear sooner than you think.
Longest 0% Balance Transfer Offers
- 0% intro APR on balance transfers for 18 months—then a variable purchase APR applies, currently 10.99% - 22.99%. A 3% fee applies to each transferred balance.
- 0% intro APR on purchases for 6 months. Then the variable purchase APR applies, currently 10.99% - 22.99%.
- Over 6,000 cardmembers rated 4.8 out of 5 stars* and J.D. Power awarded Discover "Highest in Customer Satisfaction with Credit Card Companies. Tied in 2014."+
- 5% Cashback Bonus for gas and ground transportation on up to $1500 in purchases from Jan. through Mar. 2015 after you sign up for 5% Cashback Bonus. 1% cash back on all other purchases.
- Free FICO® Credit Score on monthly statements, online and in our mobile app.*
- No annual fee, no late fee for your first late payment, APR won't go up for paying late, no overlimit fee and no foreign transaction fee.*
- Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text-and never responsible for unauthorized Discover card purchases.
- *See rates, rewards, free FICO® Credit Score terms, balance transfer terms and other info by clicking "Apply."
0% for 6 months*
0% for 18 months*
10.99% - 22.99% Variable*
- 0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 12.99% - 22.99% based on your creditworthiness.
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
- No late fees - Ever
- No penalty rate - Ever
- No annual fee - Ever
- Save time when you call with fast, personal help, 24 hours a day.
0%* for 18 months*
0%* for 18 months*
12.99% - 22.99% (Variable)*