Nobody who carries credit card balances from month to month enjoys reading the itemized interest cost. And I think most people don't take the time to multiply that number by twelve in order to find out how much they spend on interest during the course of a year. Well, here's some scary numbers for you: if you have $3,000 of credit card debt on a card with a 15% interest rate, you spend well over $400 a year on interest; if you owe the same amount on a card with a 20% interest rate, you spend over $600 a year; and, even if your interest rate is only 12%, carrying $8000 of credit card debt, the national average, will likely cost you almost $1000 during a single year.
There are a lot of things you could do with the hundreds, if not thousands of dollars you spend on credit card interest every year. The least fun thing to with that money is pay down credit card debt. But that's also the smartest thing to do. In order to stop wasting money on interest, all you need to is get a new 0% APR credit card with a promotional rate on balance transfers. (And yes, as long as you have good credit, it really is simple to do.)
Most credit card companies offer promotional 0% interest rates on balance transfers that last one year. In a nutshell, you pay them a small fee of 3-5% to transfer balances from your old card. Once this small fee is paid, you're in the no interest zone-it's kind of like the no-spin zone minus Bill O'Reilly and interest charges. Some people balk at the idea of paying a 3-5% balance transfer fee. But think of it this way: instead of paying 15% interest during the year, you pay 3-5%. Clearly, the fee more than pays for itself.
While your credit card balances are not accruing interest, you can take the money that you would have spent on finance charges and apply it to your outstanding debt. Thus, if you transfer $3000 from a card with a 15% rate, you can use the money you save to reduce your overall debt an extra 10%. Of course, you could stick with your current credit card company and give the money to them. That would be awfully generous of you, but haven't we all given the banks enough money.
To get an estimate of how much you could save with a balance transfer, test out CardWisdom's balance transfer calculator. To view current 0% credit card applications, please see the balance transfer section of Card Wisdom.
