Debt plagues millions of Americans each year, and it can be hard to make a dent in your debt, especially if you’re already living paycheck to paycheck. One solution to pay off debt quicker is to use a 0% APR transfer credit card for a promotional period.
I know what you are thinking. Credit cards are probably the reason that you are in debt in the first place. It’s true that you will need to address your budget and spending issues before using this debt repayment tip. If you cannot use a credit card wisely, then think twice before using one to help your debt repayment.
If you are serious about repaying your debt though, then these are the best cards to help you do so:
The Chase Slate® offers an impressive $0 balance transfer and 0% introductory APR for the first 15 months. This card does not come with a reward system or bonus cashback, so only use it for paying off debt. You must transfer your balance over within 60 days of opening your account to ensure you get your introductory 0% APR and get a free balance transfer.
One great thing about the Chase Slate® is that interest is not deferred. However, you will pay late payments, so be sure to stay on top of your payments.
Sphere® Credit Card
The Sphere® Credit Card offers the longest 0% APR promotion right now. You can secure 24 months of 0% APR for balance transfers. Purchases will receive 0% APR for the first 12 months of the account. There is, however, a balance transfer fee. At 4%, this fee can be a bit scary, especially when you are trying to reduce your debt, not increase it.
For example, if you had $10,000 of credit card debt you wanted to tackle, it would cost $400 to transfer the balance. However, if your current APR was 18%, you would be paying $1,800 each year. The best approach would be to transfer this debt and pay about $434 each month. By the end of two years, you would have eliminated that $10,000 debt and the $400 fee without paying any extra APR.
Keep in mind that this card does still have penalty APR d late fee for any late payments. The penalty APR is 29.99% for six months- ouch!
Citi Simplicity Card
There is a lot to love about the Citi Simplicity card. First off, no penalty APRs or late fees ever. Secondly, opening a new account gives you 0% APR for 21 months on balance transfers and purchases. There is a 3% balance transfer fee.
Balance Transfers and Credit Scores
Applying for a balance transfer can affect your credit score, since it is a hard inquiry on your credit. Your score could drop about five points, but it will quickly bounce back up with regular on-time payments.
In some cases, your credit score could improve because your debt utilization is improving. Even though you haven’t paid off any of your debt yet, your new line of credit shows that you have a bigger gap between your credit line and what you owe.
You will most likely not qualify for these cards if your credit score is not very good or excellent, so it might be a good idea to boost your credit score above 650 before applying.
How do you plan to tackle debt? Do you use these credit cards?