Punch Associates Presents: My Experience With Balance Transfers

Good Morning Savers!

Let’s talk about credit card debt. Mainly how to tackle it efficiently!

1 in 3 people lug credit card debt on their backs month to month. Of those numbers, the average person carried a $6,506 balance on their credit cards at the end of 2018, according to Experian. This number is up 2.4 percent, from $6,354 at the end of 2017.

Statistically speaking,. 37% of the people reading this blog carry some sort of credit card debt and trust me, I’m not immune to it! I don’t carry as much as the national average but I’m currently carrying more credit card debt than I have in the past.

This post was sponsored by Diamond Bloggers. All opinions are my own. 

Why Are We Like This?

I get it. Life happens. And it happens when we least expect it to happen, doesn’t it? Every financial expert around us will tell us we need an emergency fund but the reality of it is, far too many of us simply don’t have one.

Credit cards are a gift and a curse. They are great to have in unavoidable emergencies. But they can trap you in the endless cycle of compounding debt. If you identify with the latter,  there are other ways to tackle your credit card problems. One way I recently tried was a balance transfer.

I did extensive research before realizing this was the boost I needed to pay down my debt.  Like I mentioned earlier, I don’t have much credit card debt, but thanks to twice weekly stress tests for the last 5 weeks of my pregnancy, I do have enough for the double the minimum payment I make to barely made a dent once the interest hits. 

I owe $3350. Minimum payment is $64. I pay $135. Interest is $57.

As you can see the extra I’m putting up monthly is getting eaten up by the interest.

There are a few things to consider before deciding which bank will be the new owner of your debt.

Deciding who’s easier to owe

More than likely, to get an interest free offer for your balance transfer you will need to open a new credit card account.

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Things to consider

Balance Transfer fees- the average transfer fee is 3-5% of the balance. That can be a huge difference if you are transferring a large amount. This fee is per transfer, so try to consolidate your transactions to as few as possible.  

Number of interest free Months– The number of interest free months was a huge draw for me. The card I chose offered 22 months interest free. That gives me close to 2 years to pay down this debt without additional charges weighing me down. The trick here is to NOT add any additional purchases to this card while paying it down.  

Let Punch & Associates help you plan your financial future.

Hidden stipulations – Is interest back charged if you don’t pay the debt off during the interest free timeframe? Are the balance transfer qualifications more strenuous than the qualifications for the actual card? Be mindful of the terms of your balance transfer agreement. The fine print on many of the balance transfer offers I saw mentioned that you could be approved for the card, but not approved for the balance transfer. Be careful to know what this means for you if you don’t have A1 credit. You don’t want an additional hard inquiry on your credit for no good reason. 

Like any thing else in life, make sure you do your research and read all the fine print before you sign up for any offers.

Have a great testimony about how you paid down your debt or want to share a story about your experience with credit cards? Drop me a comment below!

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