Combat Debt with 0% Balance Transfer Card

I have only had one credit card my whole life, and it is one pesky little card that I just can’t pay down. My Bank of America Platinum visa card was obtained while I was in college. Obviously, most of us were reckless with credit during our college years with very little understanding of the dyer consequences of interest rates, frivolous spending and its effect on your credit. As my $500 credit line card increased to $1000 and then $1500, I continued to spend spend spend; and never paid it down enough to make a difference.

Once I became a little more “credit conscious”, I ceased the use of my card completely. However, the 2009 recession certainly reversed that decision as unemployment and mounting bills became best friends in my life. Two years later, and a balance that’s treading dangerously to the edge, I decided to take initiative and hand to hand combat this pesky 2008 Forever21 shopping spree credit card debt.

By “take initiative” I mean I decided to look into balance transfers. OK, it was not exactly my idea, but lets just say opportunity knocked on my door. All of a sudden, I began getting all these credit card offers in the mail (indication of improving credit). At first, they were a bunch of crappy cards from no name banks that will inevitably screw up your life. Then the reasonable offers started to pour in; 0% APR for 12 months on purchases, then 0% for 18 months on balance transfers and purchase, etc… One day, the card of all cards (well at least for me) came  in the mail. I was “pre-approved” for the Citi Simplicity card for 0% on purchases and balance transfers for 21months! AND, the APR after the 21months is reasonably low. I did a little research on the card from some trusted personal finance blogs and the card passed with flying colors.

I got approved for the card and almost immediately, my credit score went up 33points! That’s UNBELIEVABLE! Keep in mind that the ratio between the amount of debt owed and the amount of debt extended to you accounts for 30% of your FICO score; so its not that unbelievable. I completed my balance transfer online and the funds were paid to my old card within two business days. The balance transfer fee was 3% of the balance or $5.  The Citibank user interface was very easy to navigate and I was able to set everything up electronically. Why call customer service if you don’t have to? So far so good!

Although balance transfers are a great way to minimize your debt while  saving tons of money on interest, you still have to be responsible with credit. At the end of the day, your balance transfer card is a new line of credit so you need to be in control. Do not incur additional debt by using and abusing your old or new card. Stay focused on your goal, set up timely payments and take advantage of this interest free period. I am excited about my debt combat initiative and I’m proud to say I’m one step closer to being debt free!

Have you ever done a balance transfer to lower debt? If not, what are some ways you combat debt?