A Brilliant Way To Pay Down Your Credit Card Balances

This article is about using a simple but powerful tool to help pay down credit card debt as quickly as possible while spending as little as possible on interest charges. The tool is readily available to anyone with good credit, and more and more Americans are learning about it, and using it to their advantage.

First, a little context. Banks have become so competitive with one another in order to win new customers for their credit cards, that they have started offering better and better incentives in order to attract new customers to their cards. It began when a few banks started offering extremely low interest rates for a brief period in order to get new customers to transfer over their balances.
credit card balance

Then other banks upped the ante, and dropped rates to 0% for 6 month periods. That grew to 8 months. Very competitive banks started offering a full 12 months of no interest. Now banks are offering such long 0% intro APR periods that using these offers have become a potent part of the personal finance toolbox. There is a card offering 0% for a full 15 months with no balance transfer fee. There is even a card offering an incredible 18 months of zero interest on transfers. One can really think of these offers as getting an interest-free “loan” during the long intro period. So how impactful can transferring a balance over to a card with an ultra-long 0% intro offer be?

If your current card charges 18% APR, you would save $2,522 over 15 months by transferring a $10,000 balance to the Slate, and $2,798 over 18 months using the BankAmericard*

That’s a lot of money. Now for the second part, paying off your balances more quickly. Take the same $10,000 example. If you’re paying $250 per month on that balance, most of that payment goes toward just paying the interest, leaving very little to pay down the balance. It would take you 62 months (more than 4 1/2 years!) to pay that down at that rate.
credit cards

Now watch what happens when you stop the interest by transferring the balance, but continue paying the $250 every month. 100% of that money now pays off balance, and at the end of the 15 month period, your $10,000 balance would only be $6,250. The entire amount would be repaid in 47 months instead of the 62 months, saving you well over a year of payments.

That’s getting out of card debt a full 15 months earlier, while also saving thousands of dollars to boot.

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