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How to choose a 0% Card to Reduce your credit card debt

by Mr Credit Card

If you want to reduce your credit card debt and still have good credit, one way to speed things up is to apply for a credit card with a 0% balance transfer deal. You should then transfer any balance from the highest rate card to the new 0% credit card.

You reduce credit card debt by taking the savings from the 0% card and using that to pay the credit card with the highest interest rate. Repeat the process until you have totally eliminated your credit card debt.

However, to get the best 0% apr deal, you need to watch out for these things in the credit card.

1. The longer the 0% deal, the better

Looks pretty obvious, but 12 months is a good 0% introductory period to go for. If you get a deal for longer than 12 months in the mail, go for it. These days (post credit crisis), you will need a good credit score to get a 12 months deal. But hey, even 6 months is good enough.

2. Get one with reasonable balance transfer fee

Back a couple of years ago, credit card issuers were falling all over themselves to offer 0% deals with no balance transfer fees. But these days, most have gone back to charging a fee (ranging from 3% to 5%). There are some issuers that charge no balance transfer fee, but the introductory offer is normally not 0%.

3. Choose a card which does not use the 2-cycle average daily balance method

When you are aggressively paying off your debt (having a lower balance with each month), the 2-cycle method of calculating your monthly balance will result in a slightly higher monthly balance because you are taking the average balance over 2 cycles. Get a card which uses the normal average daily balance method. This used to be an issue but since the CARD Act, no issuer today uses the double billing cycle method.

4. Avoid 0% Balance Transfer for life Deals

These occasionally come in the mail. The catch to these deals is that you have to use your cards a couple of times a month and any minimum payments goes towards paying the 0% portion. Hence, you will be racking up interest charges to a card which is supposed to be 0%! Furthermore, there is no such thing as 0% for life. If you make the minimum payments of 4%, you will pay off the balance in 25 months. Better to get a 0% 12 month card and rollover to another one in one year’s time.

Once again, these used to be popular deals, but they have all but disappeared.

Recommended 0% Interest Credit Cards

Please check our balance transfer credit cards list for the best offers today.

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8 Responses to “How to choose a 0% Card to Reduce your credit card debt”

  1. sf mom Says:

    OK. Here’s my deal.
    I have about $12K on a no-interest for 12 months credit card from BofA. I have the $12K in my HSBC account gaining interest. My offer expires in May. I was planning on paying it off then. (I don’t plan on using the BofA card after I pay it off because my other cards have points, etc.)
    However, I received today an offer for up to 15 months no-interest, no balance transfer fees per the intro offer. I’m thinking of applying and transfering the balance again to keep the money gaining interest. I can afford to pay the minimum balance while keeping the $12K in the bank. However, this card does compute the balance by the two-cycle average dailing balance method.
    What do you think? Should I do it?

    sf mom

  2. DA Sandifer Says:

    BEWARE OF BOA World Points credit card transfer!!!! I transferred the balance of the only credit card I use to their 0% APR for 12 months, I was never told of a transfer fee, and imagine the shock when the fee was over $400! THERE IS NO CAP ON THE TRANSFER FEE-even if you are a preferred customer!

    I am growing more and more disgusted with BOA. Seems like they truly are trying to recoup the $$ they will lose from giving illegal aliens a credit card from the very people who support their business!

  3. Jessie Smith Says:

    DA Sandifer Says – “I am growing more and more disgusted with BOA. Seems like they truly are trying to recoup the $$ they will lose from giving illegal aliens a credit card from the very people who support their business!”

    BOA doesn’t give credit cards to illegal aliens genius! Geez, when some people have a chance to throw in hate you sure jump on the band wagon. BOA has been charging up fees since they’ve been increasing their branches at a rapid rate. They are probably trying to catch up on profit. More and more customers are complaining and I like to think that most of them are intelligent to know what’s actually going on. DA Sandifer how do you live with such ignorance? Don’t you have anywhere else to put your energy. We’re all just human and we need to stop letting greedy people take advantage. Your probably one of those greedy people who only notice things when it effects you.. you’d probably let someone starve and die in front of you if they’re not white. The Devil is so ugly.. so sad what this world is becoming…..a bunch of money hungry, prejudice, self centered animals like DA sandifer.

  4. nozac Says:

    “Your probably one of those greedy people who only notice things when it effects you.. you’d probably let someone starve and die in front of you if they’re not white.”

    Jessie Smith, it sounds like you may be letting your own prejudices show through.

  5. Andrew MacEwen Says:

    To Jessie Smith:

    Sure, play the race card. Just because someone objects to giving credit cardxs to illegal aliens and making the rest of us pay for it — and “us” includes African-American and Hispanic citizens — that must mean they’re a Hitlerian fascist who wants to exterminate the non-white races. That’s just a way of bullying people into agreeing with you: “We’ll brand you a hate-monger if you express a dissenting opinion.” Very egalitarian and American of you.

  6. John Says:

    Hey,

    I got this as my first card by accident. What to do? I have plenty of money, i just wanted to start building credit, but i think i made a mistake. Closing the account will be foolish. Any suggestions?

    - John

  7. James Says:

    Hi,

    I have just gained a credit card debt of about $3,000 and just need some time to pay it off without all the interest stacking. I wanted to do a balance transfer to a new credit card and just wanted to get all my facts straight before doing so. I have been looking at Citi Mastercard offering 0% APR on balance transfers, but it charges a 3% fee with a minimum of $5 and it doesn’t state a maximum. My question is, would this be a good card to get and how do I know what my maximum credit amount would be on this new card? I plan on adding a few more bills onto this card down the line and I just want to make sure that it will provide me with enough credit limit. Please help!

    Thanks,
    James

  8. Carnival Of Debt Reduction » No Credit Needed - Debt Reduction Rocks – We Are Living Debt Free! Says:

    [...] How To Choose A Zero Percent Card! [...]

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