Tag: balance transfer credit cards

so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace

As found on YouTube

so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace

As found on YouTube

If you’re looking to get your credit card 
debt under control, pay it off completely   or better manage your interest repayments, a 
balance transfer credit card could help.
  In this video I’m going to run through the 
best balance transfer credit cards for 2022.   I’ll take you through two of the longest 
0% interest deals currently available,   two cards with no transfer fees and a card 
specifically designed for those of you out there   with bad credit. And, at the end of the video, 
I’ve also included a section on some balance   transfer basics if you want to learn more or 
are new to the balance transfer world.
  With the Sainsbury’s Bank 32 Month Balance 
Transfer Credit Card you’ll get, you guessed it,   32 months interest-free on your balance. 
There is a transfer fee of up to 3% but,   with this card, you’ll also be able to earn up to 
5,000 bonus Nectar points in your first 2 months   as well as extra rewards every time you shop at 
Sainsbury’s, Argos, Habitat or TU clothing.
  This card comes with no monthly or annual account 
fee. However, it is only available for new   Sainsbury’s Bank customers.

If your goal with 
a balance transfer card is to clear your debt,   I would be very wary of those rewards points 
perks, as they could end up encouraging you   to use this card for everyday spending 
rather than pay off your balance.
  The longest deal we found at the time of 
publishing this video is the MBNA Long 0%   Balance Transfer Credit Card which gives you up to 
33 months interest-free on your balance transfer,   with a transfer fee of 2.69% for 2 months. And, 
all with no monthly or annual account fee.
  When it comes to downsides, the main thing 
to consider is that the transfer fee will   increase from 2.69% to 5% on any transfers you 
make after that 2 months intro period is over.   And, again, if you don’t need a whole 33 
months to clear your credit card balance,   it could be worth looking at some 
no-fee balance transfer cards.
  The second longest no-fee deal we found was 
with the HSBC No Fee Balance Transfer Credit   Card Visa (I swear these card names are getting 
longer). This HSBC card will give you a 20 month   break on paying interest on your balance, with 
no balance transfer fee; and anyone accepted   on this card is guaranteed to get the full 20 
months.

You’ll also have access to discounts and   exclusive offers on shopping, leisure activities 
and meals out via the HSBC Home and Away scheme;   and all with no additional account fee.
While 20 months is a pretty reasonable   interest-free period, there are longer 
deals available if you need more time to   pay off your balance. Another thing 
to remember is that the no fee deal   only applies to balance transfers made within 
the first 60 days of opening the account.
  Our longest no fee deal at the time of publishing 
is another card from Sainsbury’s Bank.

Their no   balance transfer fee card will give you up to 21 
months interest-free on your balance with no fee.   With this card, you’ll also be able 
to earn 3 Nectar points for every £1   you spend in Sainsbury’s or Argos, and 1 
Nectar point for every £5 spent elsewhere.   This card also comes with no account fee.
Some downsides to consider include the fact that   you need an annual income of at least £10,000 to 
be eligible and people with low credit scores are   unlikely to be accepted. Also, if your goal with 
a balance transfer card is to clear your debt,   then it’s likely you won’t be using 
this card for everyday spending.   In which case, the Nectar point 
perks are pretty redundant.
  If your credit score is not the best, a 
Fluid Credit Card could be a great option.   Fluid is geared toward those who might 
struggle to be accepted by more mainstream   cards, and offers 0% interest on 
balance transfer for 9 months with   a 4% fee.

The application process is fast 
and straightforward, and many people get a   response the same day. The card also comes 
with no monthly or annual account fee.
  This card is more of a stepping stone product 
to help you improve your credit score,   and isn’t ideal for long-term use. Once your 
credit has improved, if you still have a   balance to pay off, it might be worth checking 
out some of the longer 0% deals available.   Another downside is the 4% transfer fee, which 
is quite high compared to other cards, and will   increase to 5% on any transfers you make after the 
9 months interest-free period is over. I will say,   though, that in general you would expect to see 
higher rates on credit builder credit cards.
  One of the first things to know is that you can’t 
transfer a balance between two cards owned by the   same bank.

That may sound obvious but, actually, 
a few of the more boutiquey, younger challenger   banks are actually owned by a bigger high street 
bank. For example, First Direct is owned by HSBC.   If you’re in any doubt who owns your bank account, 
click the first link under extra resources in the   description below, and use our searchable table 
to find out who owns your bank or the bank you   want to transfer your balance to.
The second thing to know is that,   if there is a balance transfer fee, instead 
of paying that upfront as a separate fee,   in most cases it will simply get rolled into your 
new balance on your balance transfer card.
  Every month, you must pay at least the 
minimum amount otherwise you could get   hit with penalties and some providers 
may even withdraw their 0% deal.

  And finally, balance transfer credit 
cards still require you to meet a bunch   of eligibility criteria and you may get offered 
a shorter deal than what the provider advertised   if you don’t fully meet those criteria.
For more info and to start comparing the   best balance transfer card for you, head to 
finder.com by clicking this link here.
  If you enjoyed this video, give us a like, 
subscribe and hit that bell button to be the   first to know when a new video drops.
Thanks for watching..

As found on YouTube

hey there i'm nathan hamilton director for the ascent by the motley fool in this video today we'll explain how a balance transfer works and what to look for in a balanced transfer credit card knowing what to look for is essential because when used wisely a balanced transfer credit card can help you pay off debt and save money on interest but if you're not careful they can be a tool that gets you further into debt so first off let's explore what a balance transfer is and how you can use it to help pay off debt faster a balance transfer is when you move debt from one credit card over to another credit card after that your original account is paid off and you make payments on just the new card this is usually done to secure better terms such as a lower interest rate or a zero percent intro apr and consider that most balanced transfer credit cards charge a fee for moving a balance over now this fee is a percentage of the total amount transferred and usually ranges from three percent to five percent even with the fee though it's often worth doing a balance transfer that's because balance transfer credit cards come with a zero percent intro apr on transfers this introductory period can last anywhere from a few months to 18 months or more and with a zero percent intro apr you don't have to pay any interest until the intro period ends after that of course you'll start paying the card's regular apr on the balances remaining and that interest rate can actually be quite high if you can't pay off your balance before the intro period ends you can save a lot of money if not you might end up with even higher interest charges an example may be best to demonstrate how much money you may be able to save by transferring a five thousand dollar balance to a balanced transfer credit card so let's say you start with a new balance transfer card that has a zero percent intro apr for 18 months long a three percent balance transfer fee means you'd be charged 150 for bringing your transfer over if you paid off in 18 months you'd pay just 286 dollars a month for your bill and wouldn't be charged any interest during that time but if your old card came with a 17 apr you'd spend 812 on interest over that same 18 month period now it's evident why paying a balanced transfer fee can be a great idea but how do you pick the right balance transfer credit card for you fortunately the decision mostly comes down to considering just three items one the length of the zero percent intro apr for two the balance transfer fee and three the suggested credit score range firstly the longer your intro apr period the smaller your monthly payments become this will also make it easier to pay off your balance before the card's interest rate jumps back up to the ongoing rate next knowing the balance transfer fee can help you decide if you'll save money using balance transfer strategy or not and lastly getting approved for your credit card is closely tied to your credit score our credit card reviews on site include suggested credit score ranges that will give you the best shot of approval and while rewards shouldn't be your main priority when paying off debt some balanced transfer credit cards do offer cash back rewards and finding a card with rewards will give it some staying power in your wallet because once you've paid off your balance you'll still be able to earn cash back on your everyday purchases now that you have the essentials to confidently take action you can use our handy card comparison tool to find the right offer for your needs just visit full.com compare dash cards to get started and you can compare credit cards side by side you

As found on YouTube

Do you currently have credit 
card debt? Are you trying to   pay it down…but it seems like somehow 
you just keep getting deeper into debt? Throughout our many years in banking, we’ve worked 
with a lot of clients in the same situation.   So today, we’re going to discuss the best 
options for paying down credit card debt.   First, we’ll talk about why a balance transfer is 
one of the best weapons in a war on debt. Then,   we’ll discuss personal loans and how they work. 
Finally, we’ll wrap up by reviewing a few options   that might be helpful to someone who isn’t able to 
qualify for a balance transfer or a personal loan.

Hello everyone, this is Luis with Herobanker.com 
and we’re you’re friendly neighborhood bankers. Debt comes in all forms and sizes. Some debt, 
like a mortgage or a car loan, can be beneficial.   But other debt, like credit card debt, can 
feel like a huge weight on your shoulders.   This is especially true if 
you’re only making minimum   payments and the amount that you 
owe is going up instead of down. So, if you’d like to find out the best options for 
dealing with credit card debt, let’s get started. Option #1 is a credit card balance transfer. 
With a balance transfer, you’ll be taking the   total amount that you owe…and moving that balance 
over to another credit card, with a lower interest   rate.

The reason why this is beneficial 
would be best explained with an example: Sally currently has a credit card with 
ABC Bank. Her balance on that credit   card is $10,000 and the interest 
rate that she’s paying is 20%.   This means that every year, Sally will incur 
about $2,000 in interest charges on that card. Now, this doesn’t necessarily mean that Sally 
will pay $2,000 in interest charges for the year.   Because if Sally is only making the minimum 
payment every month, then she’s not even   paying down what she owes. So, in this case, Sally’s 
total debt would be going up instead of down. This is a major factor in how many people end 
up down the rabbit hole of credit card debt.   We highly advise against making minimum 
payments, when possible. Now obliviously,   things happen and sometimes the only 
option is to make the minimum payment.   But if this is the case, then we need to 
understand that paying high interest on   a credit card, is probably not the best 
way to handle our debt in the long term.

So, what do we do? Well, this is 
where a balance transfer can help.   Remember, Sally has a credit card with ABC Bank.   She currently owes $10,000 on that card 
and she’s paying an interest rate of 20%. Thankfully, Sally comes across a Balance 
Transfer Credit Card from XYZ Bank.   XYZ Bank is offering Sally a new credit card. This 
card comes with an offer of 0% APR for 12 months   on balance transfers. So, if Sally accepts this 
offer, this means that she’s opening a new credit   card with XYZ Bank, with a 0% interest rate for 
12 months. The $10,000 credit card balance that   is currently with ABC Bank can now be transferred 
to XYZ Bank, at a much lower interest rate. So, instead of paying 20% on her old 
credit card she now has 12 months of   0% on the new credit card. Remember, 
Sally would have incurred about $2,000   in interest if she had continued to pay 
20% on her prior card. But with this   new card she’ll pay 0 dollars in interest for 
12 months because for 12 months her APR is 0%. Paying $0 instead of $2,000 over the same 
amount of time sounds too good to be true,   right? And this is why a balance transfer 
can be a very valuable tool in your   financial toolbox.

When used properly a 
balance transfer can save you hundreds,   if not thousands, of dollars…and because 
you’re not paying interest during the   promotional timeframe, this makes it 
easier to actually pay down your debt. Now, the new credit card will most likely 
charge what’s called a Balance Transfer   Fee. This means that you’ll
pay a small fee in order to process   the balance transfer. Some of you may be 
thinking, I knew there was a catch! Well,   not really. Because the typical balance transfer 
fee is only 3-5%. So, let’s do the math on that. Remember, in one year, Sally would have incurred 
$2,000 in interest on her prior card. But a 3%   balance transfer fee on a $10,000 transfer is only 
$300. So, over a one-year period, Sally would save   about $1,700 by doing a balance transfer…and 
that is the power of a balance transfer.

A balance transfer can also be used 
to payoff multiple credit cards,   not just one. So, if you owe money on three 
cards, you can do a balance transfer for   each card. This will consolidate 
all three of those cards into one. Most balance transfers will also allow you to 
transfer other debts, like a personal loan,   as well. So, it’s usually not 
limited to just credit card debt. One final note on balance transfers is 
that sometimes they can be done   on one of your existing credit cards. So, if 
you have money available on a credit card,   then your card provider may reach out 
to you with a 0% APR Balance Transfer   offer.

These are sometimes sent 
to you via postal mail and e-mail. Before we move on, if you’d like more info about 
Balance Transfers and interest on credit cards,   check out Herobanker.com. We’ve included links 
to these pages in the video description. Also,   if you’re enjoying the content, we would greatly 
appreciate it if you can hit that subscribe button.   That way, we can keep you updated on 
banking, finance, the economy, and more.

Ok, the second option for dealing with credit card
debt is a personal loan. A personal loan allows   you to borrow money for a specific purpose, such 
as debt consolidation. Once the loan is approved   and funded, your existing debt will be paid off 
and consolidated into one new loan. You will then   repay that loan with monthly installment 
payments, until the loan is paid off. The   payment on this loan will have a fixed interest 
rate and a fixed payment amount every month. So, a personal loan might look something like 
this: George takes out a $10,000 personal loan.   The loan has an APR of 15% with a 5-year term. 
This means that George will make a monthly   payment of $238 for the next 5 years. 
After that, the loan will be paid off.

You can think of a personal loan 
as similar to an auto loan. But,   instead of the money being used to buy a car, 
you’ll be using the money to consolidate debt. Ok, now let’s discuss some of the 
pros and cons of a personal loan. One benefit is that with a personal loan you 
will have one fixed monthly payment. This   usually makes it easier to pay off debt. 
Also, you will probably pay off your debt   quicker and pay less interest. Remember, with a 
credit card, it’s easy to fall down the rabbit   hole of only making minimum payments…and 
doing this does not actually lower the   amount that you owe. In fact, this can often 
cause the amount that you owe to increase.   But with a personal loan, the amount that 
you owe will immediately start to decrease. This brings us to one of the cons of a personal 
loan. With a personal loan, you might have a   higher monthly payment than you’re used to. This 
is especially true if at the moment, you’re only   making minimum payments on your credit card.

For 
example, let’s say you have three credit cards and   the minimum payment on each card is $25 per month. 
In this case, you’re only making total payments of   $75 per month. But if you consolidate that debt 
into one personal loan, then your monthly payment   will probably be higher than $75 per month. This 
is because the monthly payment on a personal loan   is a principal and interest payment. But with a 
credit card, those $25 minimum payments are mostly   going towards the interest owed, and not the 
principal balance. Again, think about a personal   loan like an auto loan. These loans tend to 
have higher monthly payments than a credit card. Another drawback of personal loans is that the 
interest rates tend to be on the higher end. Also,   some personal loans can charge fees that can
get pretty high. The interest rate and   the fees will usually vary, depending 
on your credit and other factors. Someone with good credit, high income, and 
low debt, will probably be looked at as a   more credit-worthy borrower. This usually 
means a lower interest rate and no fees.   However, someone with bad credit, low income, 
and a lot of debt, will probably be looked at as   a less credit-worthy borrower.

This usually means 
higher interest rates and relatively high fees. So, you might see that ABC Bank offers personal 
loans with an APR as low as 9.99%. But remember,   it’s likely that the only people who 
will be approved for that low rate,   are people with good credit, high income, and 
low debt. Someone will bad credit, low income,   and high debt will probably get a higher interest 
rate. Every lender is different.

Some lenders   cater to borrowers with good credit. While other 
lenders cater to borrowers with bad credit. Usually if a lender caters to borrowers 
with good credit, they will not charge a   fee. Or, the fee will be small. But if a lender 
caters to borrowers with bad credit, then those   lenders tend to charge fees that can get pretty 
high. The most common fee is an origination fee,   which is a fee for processing the loan. This fee 
is usually a percentage of the total loan amount. So, let’s say on a $10,000 loan 
that the origination fee is 5%.   This means that the lender will charge you $500 
and then give you $9,500…with the $500 deduction   being the origination fee. Obviously, this eats 
into your total amount received, which is not   great. But unfortunately, for someone with poor 
to fair credit, this might be the only option. Before we wrap up personal loans, we’ll 
say this: personal loans can be tricky.   Oftentimes if you really need a personal loan, 
then it can be tough to qualify for one. This is   because if you’re in need of a personal loan, then 
it’s likely that you’re already in debt…which a   lender is going to view as higher risk.

Therefore, 
this can make it more difficult to qualify. The third option for consolidating debt is 
probably the best option. But it requires   you being a homeowner. This third option 
is a Home Equity Loan or Line of Credit.   This means that you’re taking out a loan 
against the equity in your home. We won’t   get into all the specifics of how this works, 
because that would require a video of its own. But basically, if you have equity in your 
home, then you can take out a loan against   that equity. The biggest benefit of doing this is 
that you will probably secure the best interest   rate possible for a loan or line of credit.

This 
interest rate will likely be much lower than the   interest rate for a personal loan. This is because 
banks really like it when you borrow against your   home…because people are less likely to default 
on a loan, when their home is used as collateral. One drawback to a home equity loan is 
that they often take a longer time to   process. Depending on the lender, the process 
usually takes a few days to a few weeks.

So,   if you need the money fast, then this might 
not be the best option. Another potential   drawback is that you’ll be borrowing against 
your home, which some people might not like. Ok, so those are three of the best 
ways to to deal with credit card debt. If none of   these options work for you, then there 
are a few other options.

These are not   options that we necessarily recommend, 
for a variety of reasons. But if all   other options have been exhausted, then 
these may be worth taking a look at.   So, we’ll just list these options quickly. But 
before we list them, we also suggest making sure   that you’ve come up with a debt management 
plan first. This should involve lowering   your expenses, if possible, and also having 
a long-term plan for how to handle your debt. Ok, so these other options include: Number One: Debt settlement programs – These are 
somewhat similar to debt consolidation loans,   but they also have differences. Some non-profit 
companies will offer debt consolidation loans   with certain limitations or contingencies. Other 
companies will offer debt settlement programs.

They   may work with your creditors to lower the amount 
that you owe. However, this option can be costly,   messy, and time-consuming. Also, this option is 
almost certain to negatively impact your credit. Number Two: 401k or Pension – If you have a 
401k, then you may be able to withdraw money   or take out a loan out against it. This often 
comes with penalties and tax implications.   So usually, this is not something we 
advise doing for debt consolidation,   unless other options have already been exhausted.   Also, if you’ve recently left a job, then you 
may be able to withdraw from a pension. However,   not all companies offer a pension, and this can 
also come with penalties and tax implications. Number Three: Auto Equity Loan – If 
you have equity in your vehicle,   you may be able to get a loan against the equity. 
This is similar to a home equity loan.

However,   keep in mind that you’re using 
your vehicle as collateral. So,   if you can’t make the loan payments, then 
it’s possible that your car can be taken away. Once again, these are all options 
that we wouldn’t usually recommend,   unless other options have first been exhausted. Ok, so that’s our conversation about some 
of the best ways to deal with credit card   debt. We hope the information was helpful 
and easy to understand. We’d love to hear   any questions or comments that you might have. 
Have you recently consolidated your debt? If so,   what method did you use and how’s it 
working out? Or, would you like us to   drill down further on anything that we discussed today? Thank you again for taking time out 
of your day so that we can help you   become your own financial hero! 
We hope to see you again soon.

If you’d like to see more content like this,   we would greatly appreciate a 
LIKE and SUBSCRIBE! 🔔 Thank you!.

As found on YouTube

In today's video I'm going over how to
consolidate credit card debt with three proven ways because if you guys do have
credit card debt I want you to get out because even if you've got just a little
bit of credit card debt that still sucks because you're gonna be paying interest
on it but the real big problem is when you have a ton of credit card debt and
that's because you'll be spending a ton of money on interest and on top of that
you're gonna be jacking up your credit utilization score as well so in this
video I'm gonna teach you how to consolidate credit card debt but I'm
also gonna teach you why you should do it in the first place and if you just
found this channel I'm Jason with honest finance and I make a lot of videos on
different topics that'll give your life and your finances more value so feel
free to subscribe if you guys want to or just give this video a like
but now let's start talking about debt consolidation now before I start talking
about how to consolidate credit card debt I first need to go over why you
should do it in the first place because there's mainly two reasons why you need
to get out of credit card debt and the first reason is called your credit
utilization score this controls 30 percent of your credit score which is
255 points and it all has to do with how much you're spending on your credit
cards versus how much their limits are so basically if you've got three credit
cards with a total spending limit of $20,000 but you spend $8,000 during the
month then your credit utilization score is gonna be 40% which is not good now
I'll explain why it's a bad thing in just a second but in order to do the
math all you do is take 8,000 divide it by 20 thousand and then that gives you
your utilization score you want your utilization score to be below 15%
because that's going to give you the biggest boost to your credit score and
if you can get the score between 1 and 5 percent then that's going to be the
absolute best utilization score that you can have towards your credit score and
obviously if you have a ton of credit card debt then your credit score is
always going to suffer because of the bad utilization score and if you do want
to know more about how your credit utilization score works then you can
watch this video up here where I'll teach you quite a bit more about it so
if you want to improve your credit score then you're gonna have to get rid of
your credit card debt and maybe one of the only ways you can do that is through
consolidation now the second reason why you should consolidate your credit card
debt is simply because of how much the interest is actually costing you I mean
let's say that you owe $10,000 on all your credit cards and the average
interest rate is 22 percent well with those numbers you're going to be wasting
about a hundred and eighty dollars in interest
per month just based on a $10,000 balance but if you consolidated all of
that debt into just one loan that was 8% then you're only gonna be paying about
$65 a month in interest which is so much better now those are the reasons why you
should definitely get out of credit card debt but now I want to talk about how to
get out of credit card debt so let's get started on that and if you've made it
this far into the video could you please just comment down below and say I'm
still here that way I still know who's watching the video
Thanks the first way to do it is just by taking out a debt consolidation loan and
then paying off your credit cards and then you'll just have one monthly fixed
payment now highly advise that you only do this if you get a good rate and terms
and then you make sure that you pay off your credit cards and you never go back
into the credit card debt again because if you just keep your same spending
habits then you're gonna rack up another credit card balance and you'll be paying
off the loan at the same time so just take my advice and stop all of your bad
spending habits and get out of debt for good now as far as lenders go you can
check with your local credit unions or you can check online for some of the
best rates and just stick with reputable lenders because there are a lot of
really bad personal loans out there and I don't want you guys to get into any of
those I especially don't want you guys paying any origination fees because
those can actually be up to 5% of the total of the loans value that you have
to pay up front right when you get the loan so let's just say that you take out
a personal loan for $10,000 with a 5% origination fee well you're gonna have
to pay an instant 500 bucks and then when you actually take out the loan it's
only gonna be for ninety five hundred bucks all because of the stupid
origination fee a lot of the big lenders even charge origination fees like
prosper and Lending Club so I would definitely recommend going with someone
that doesn't charge an origination fee because it's just a waste of money
that you don't have to pay I'd recommend checking out light stream loans for debt
consolidation because they've got some of the best rates in the industry and
they don't charge any fees they don't have any dirty origination fees and they
don't have prepayment penalties as well they'll also beat any competitors rate
for the same loan by a tenth of a point so you'll always know that light stream
is gonna have the best rates from anyone now I'll leave an affiliate link in the
description which means I may be compensated if you click through it but
just keep in mind that I want you guys to check out light stream loans because
I'm only gonna recommend companies that I think are the best value for you now
the next way you can consolidate credit card
is by actually finding a new credit card with a zero percent balance transfer
offering because that way you can move all of your debt into the new card and
pay zero percent interest they'll usually give you about twelve months
with zero percent interest so it's a really good way to just quickly tackle
your credit card debt but there are some cons to it as well for instance you'll
most likely have to pay an upfront 3% balance transfer fee which is just a
total waste of money and then on top of that your credit utilization score is
still gonna suck because you're just moving the debt on to another card so
honestly it's not always the best option to move your debt from one credit card
onto another credit card but it is a solution if they offer the 0% transfer
and that's because if you've got a little bit of credit card debt at 0%
interest for 12 months then you probably have enough time to tackle the debt and
then not worry about it ever again now last time I lists of debt consolidation
is called cash out refinancing what this means is that you can either refinance
your car or your house and you can actually take some of the equity that
you've built up in them and then you can use that as a cash out refinance so that
you can pay off your credit cards so if you refinanced your car for $20,000 but
it was actually worth $30,000 then you could actually take some cash out on the
loan and make it a little bit bigger like 25,000 and then you can use that
extra money to pay off your credit cards this is a great way to get rid of credit
card debt because the interest rates probably gonna be a lot cheaper than it
is on a personal loan but I would still warn that you're taking money out
against your equity which is not a good thing because if you take out money from
your built up equity then you're just gonna owe more in that particular item
just to pay off your credit cards and on top of that you've still got to go
through the hassle of refinancing and trust me if it's a home just the closing
costs alone are not going to be worth doing that option so I would only look
into this option if you were gonna refinance anyway and then you can pay
off your credit cards at the same time now these are the ways that I'd
recommend you guys can use to get out of credit card debt there are definitely
more ways that you guys can do it but these are the three ways that I would
recommend trying first because they work credit card debt totally sucks but you
can get out of the hole if you consolidate responsibly just pay off the
debt and make sure that you don't get into the same situation a second time
once again I'm Jason with honest finance and I make a lot of videos on different
topics that will give your life and your finances more value so feel free to
subscribe if you want to or you can check out some more of my videos here
that's all

As found on YouTube

Hi. My name is John Ulzheimer, and I'm a
credit expert who contributes to CreditCardInsider.com. If you have any questions for us then please submit them in the comments section below. Today's question comes from YouTube user Adriana "Adri" Vargas. Her question is this… What is a intro APR? She would also like me to talk about the
difference between an intro APR and a regular APR. And then purchases made under both the regular or the intro APR.

So first off, the APR is the annual percentage rate. So in other words it's the
interest rate you're gonna pay if you do choose to carry a balance on your card from 1 month to the next. If you pay your balance in full every single month and you never carry a balance forward, you don't need to worry
about the APR, because you're not paying interest, so there's nothing to apply interest rate
to. Most credit card issuers today issue rewards style credit cards. And one of those types
of rewards cards is the 0% interest APR card.

And most credit card issuers are marketing those to consumers who have debt on other cards. And their marketing them as balance transfer options. So if you have a balance on one of your cards, you may get offers from another card issuer saying, "Hey! Transfer that balance from that other card to our card, we'll give you an intro APR of 0% for 12 months, 18 months, whatever, and you'll also get 0% APR on new purchases. So essentially it is a bonus annual percentage rate, of some very low, in many cases, 0% structure, which is an
incentive for you to do business with them. Now, the reason this is called an intro or an introductory APR, is because it's not going to last forever.
Obviously a credit card issuer is in business to make money.

And one of the ways they make money is
by charging you interest on the debt that you carry from month to month. So they have to eventually change your APR from the intro APR of 0% to something greater than 0%. And that APR is what's commonly referred to, and in Adriana's question, is what's referred to as kind of a regular or persistent interest rate. That
interest rate is obviously going to be set based on the credit
quality of the applicant. But generally speaking, it's going to fall in the 15 to 16% range, although that can vary greatly in either
direction. But generally speaking, 15% is a good target or expectation. If you make
purchases under the intro APR, meaning that you make a purchase at 0%
APR, the APR on that particular purchase cannot go up, unless you do something like start missing payments. If you start missing payments, then the credit card issuer can asign a higher interest rate retroactive,
meaning that they can retroactively change the interest rate on
purchases that you've already made. But generally speaking if you continue to make your payments on
time, then all the purchases you made on under the intro APR will be priced out at the intro APR.

And remember, this is only relevant to
the point where you actually use the card long enough that the APR
actually expires. The regular APR, let's just say
hypothetically that that's 15%, any purchases made when that particular
APR adjusts to the new regular interest rate, any purchases made
under that, at that period of time will be priced out under those particular terms. So it's something to keep in mind, because
you may start getting credit card statements after you've had the account for awhile, that actually have variable purchases under variable interest rates. One is the intro.

One under the regular APR. Another thing to keep in mind is, there may be language in your cardholder
agreement that allows the credit card issuer to
charge you interest retroactive to the day that you
opened the card if you have not paid off the balance
transfer in full. This is going to be very expensive if
this is applicable to your card and you don't take care of it. So let's say you get an intro APR at 0% for 12 months, and you transfer $10,000 to that card.

And then for 12 months, you have no interest on that $10,000. If you don't pay that $10,000 off by the time 12 months expires, and your grace period of 0% APR expires, they're gonna hit you with interest all the way back to the first day that you opened your account, on the entire amount. So be very careful when you're using these types of cards. The expectation is that right now there's no interest. But going forward, there absolutely can be.

So you're going to want to work very diligently to payoff that card as quickly as possible, before the intro APR expires. If you have
any other questions pertaining to credit or financial topics, then please submit them to CreditCardInsider.com or in the comments section below.
Have a nice day!.