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Using 0% Apr Credit Cards To Become Debt-free
By ASAP Credit Card, Thu Dec 8th
/p> Normally, when you're looking to consolidate credit card debtyou have the following options: get a debt consolidation loan-or- apply for a home equity loan. But if your credit card debtis still manageable, you may want to consider consolidating yourbalances to a 0% APRcredit card instead. Using a 0% APR credit card will helpyou spend more money paying off your balances, and less oninterest charges!
To use a 0% APR credit card to pay off your debts, follow thesesteps:
1.) Transfer your existing credit card balances to a new 0% APRcredit card.
2.) Continue to pay down your balance as usual. But instead ofpaying only the minimum each month, also pay the amount ofinterest you would have paid with your other card. This willreduce your debt even quicker! 3.) Watch your introductory period. When it's about to expire,shop around for a new 0% APR credit card and transfer yourbalances again. 4.) Continue this cycle until you become debt free!
0% APR Credit Cards vs. Debt Consolidation:
So
you're considering a debt consolidation loan instead of a 0%APR credit card. Let's see how much you could save and how muchquicker you could pay off your debt using the method shownabove. Here's an example:
Assume you have an existing credit card debt of $15,000. Youwould like to pay $250 per month until the debt is paid off.Your debt consolidation loan was approved at 7% (much lower thanyour original 12% credit card!).
Beginning Balance$15,000 Total Principal Year 1$2,014 Total Principal Year 2$2,160 Total Principal Year 3$2,316 Total Principal Year 4$2,483 Total Principal Year 5$2,662 Total Principal Year 6$2,855 Total Interest Paid$3,516
Total Amount Paid:$18,516 TOTAL # Payments Made:70 Now let's compare paying off this same debt using 0% APR cards
Beginning Balance$15,000 Total Principal Year 1$3,600 Total Principal Year 2$3,600 Total Principal Year 3$3,600 Total Principal Year 4$3,600 Total Principal Year 5$ 600 Total Interest Paid$ 0
Total Amount Paid:$15,000 TOTAL # Payments Made:50
You save $3516 over a six year period! Plus you'll be done withyour payments 15 months sooner! Imagine being debt free over ayear before you planned!
Words of Advice:
Although using 0% credit cards to pay down your debt is a greatoption, try not to switch credit cards too frequently. Doing socan negatively impact your credit report. Shop around for 0% APRcredit cards that have the longest introductory periods and thelowest APRs (after the intro period) to buy you a littlebreathing room. Also, don't fall into the trap of spending againon your old credit cards. Either close them or deactivate themso that you don't get yourself into further debt. And don'toverspend with your new card either (even if it is 0%)! Finally,make sure you apply the money you saved on interest to your newpayments to help eliminate your debt faster.
To see a complete list of 0% APR credit cards, please visit:
ASAP Credit Card About the author:None
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