Is your credit card debt keeping you up at night? You are not alone. In a recent study, more than half (56%) of Americans said money concerns cause them to lose sleep. The worries about money range from everyday expenses to saving for retirement.
One of the prevalent causes of stress cited was credit card debt. Many Americans struggle to pay off their debt, leading to a lot of sleepless nights. In the first quarter of 2019, the average credit card balance reached $6,028, according to Experian. In the Bankrate survey, about 51% of Americans said they are pessimistic about their ability to pay off their credit card debt. Considering
If you want to start getting a good night’s sleep again, a balance transfer credit card with a long 0% introductory APR might be a good option to help you eliminate your credit card debt.
A balance transfer is exactly what it sounds like. You move your high-interest credit card balance from one or more credit cards to a new card with a zero-interest period. While you are essentially paying off one credit card with another, you still owe the same amount.
Balance transfer credit cards can help you:
Reduce debt and avoid high interest - With a balance transfer credit card, you will have a break from having to pay interest during an introductory period, which can range from 12-21 months. Depending on the amount of your debt and interest rate, a balance transfer can add up to significant savings. Plus, you’ll be able to pay off your debt quicker since you will be paying more money towards the principal.
Simplify your finances - If you have debt on more than one credit card, a balance transfer enables you to consolidate your balances to one card so you only have to make one monthly payment to track.
Improve your overall financial health – Credit card debt is expensive. By committing to eliminating your debt, you are not only reducing your stress and sleeplessness but paying your balance by the end of the introductory period will actually raise your score.
Comparing Balance Transfer Credit Card Offers
If you think a balance transfer card is a good option for paying off your credit card debt, you should evaluate your options and shop around to find the right offer for your financial situation. Here are some key factors to consider when comparing balance transfer credit card offers”
0% introductory APR offer – All good things come to an end and so does the zero-interest period. When the 0% APR expires, the interest rate reverts back to the standard interest rate, which can be as high as 26%. To get the benefit of a balance transfer, sake sure you pay off your balance before the expiration date. Otherwise, you may end up with more debt than when you started.
Balance transfer fees – Most credit card issuers charge a 3%-5% balance transfer fee on the transferred amount. Make sure to take the balance transfer fee in account when calculating your total debt amount. In many cases, the 0% APR offer can offset the balance transfer fee. There are few cards that waive the balance transfer fee waiver for a limited period of time. If you are looking to consolidate balances from several cards, you might want to consider a card waiving the fee.
Types of debt – While your main focus for getting a balance transfer credit card to eliminate your credit card debt, some cards allow you to transfer other types of debt you may be able to transfer balances from different types of credit accounts, including cards, car loans and student loans. Keep in mind that multiple transfers can mean multiple transfer fees.
Credit Score – Most cards require good to excellent credit to qualify for the best 0% APR offers. A good credit score ranges from 700 to 749, and excellent is considered anything above 750. If you have a low credit score, don’t apply for a card. Getting declined for a credit card will not affect your credit score but card issuers perform a hard inquiry on your credit when you apply for an account and too many in a short period can lower your score for up to two years.
Regular variable APR – the interest rate you will be charged if you don’t pay off your balance before the introductory 0% APR period ends. If you plan to keep the card after you pay off the balance, you will also want to look closely at this rate.
Balance transfer limit - Make sure the card’s credit limit is high enough to accommodate your entire balance. Credit score and annual income re the two biggest factors in determining your credit limit. Usually the higher your credit score and income, the higher your credit limit. If your limit is not high enough for your entire balance, you’ll need to decide whether it makes sense to transfer only a part of your debt. You would still need to pay interest on the balance remaining on your existing card.
Card issuer – In most cases, you cannot make a balance transfer between Most credit card companies do not allow you to make a balance transfer between account
Credit Card debt causes a lot of anxiety for people. They worry if they will ever be able to pay it off. Instead of letting your debt cause you to lose sleep, start working towards a solution. A balance transfer card is a great option to help you conquer your credit card debt. Use the advice in this article to find out if a balance transfer card can help.