How to Repay Debt with Credit Card Balance Transfers

Credit card balance transfers can be used legally as a way to repay debt. One of the major advantages of choosing this method of credit is that a lot of cards offer 0% rates on balance transfers. A 0% rate ensures that after paying the initial arrangement fee no other charges apply as long as the balance is repaid or transferred somewhere else before the introductory period expires.

A second significant benefit of this type of credit agreement is that you can vary the amount repaid each month to suit your finances. I’d always suggest repaying the highest amount you can afford so the balance reduces as fast as possible however if you need to pay less in certain months then the option is available. You can choose to pay less if you need the money elsewhere for example paying higher interest debts.

By repaying debts using this option you can prioritize which debts incur higher interest and reduce them first. Choose a credit card company that offers an introductory rate of 0% and transfer as much of your debt as possible allowing you to focus on repaying remaining more expensive debts first. This will ensure your debts cost you less in the longer term.

You should remember a number of critical points if you choose to reduce your debts using this method. Most importantly never forget to always make at least the minimum amount due on time. Failure to do this will almost certainly incur additional charges and end your introductory balance transfer rate. Always make payments in plenty of time or again you could be charged and lose the introductory balance transfer rate. If for some reason you cannot make the minimum payment on time contact the credit card company before the payment is due to explain your reasons why the payment will be late.

Another critical rule is to prioritize your most expensive debts first. If you have other credit at a higher rate of interest then it is more expensive you should reduce this first to reduce the overall amount you repay. After you have removed higher interest credit then move onto the next highest interest and so on until your debt is repaid.

Always repay as much as you possibly can from your debts. The introductory rate on your credit card transfer will not last forever and the quicker you repay the balance the faster you can forget it. If possible do not add additional spending to the balance transfer as this incurs higher interest charges than the original balance transfer and will not be repaid first.

When you sign up for the credit card make a note of the time of the introductory period of the balance transfer. As you get closer to the expiry date look around for a new card company to transfer any remaining debt to. Don’t worry if you get rejected for the first one you apply for, there are lots of card companies out there offering low introductory balance transfer rates. Once you have your new card, hopefully at 0% interest on balance transfers, move your money from the old card to the new and destroy your old card. You’ll incur a small fee for transferring the debt and if the rate is low enough you’ll pay no interest again.

Try to make sure that you live within your budget and do not use easy credit as a way of purchasing items. Any items bought on credit cards will eventually have to be repaid or you’ll face difficult bankruptcy procedures that will affect your credit rating for years. It is possible to clear all your debts using this method, dependant on the size of your debts and the amounts you can repay each month. It may take a long time but you will eventually be free of debt. I was in debt for several thousand pounds and used this method to clear my debts and now live a debt free and happier life.