Photo (cc) by 401(K) 2012
I receive a lot of questions about credit cards, but this one stands out for being short and to the point:
What is the best card for paying down debt, approximately $10,000?
Although the question was brief, I will provide a thorough answer because there are so many like you in a similar situation. $10,000 is a lot of money, and there are two things you will need to pay it off as quickly as possible.
First, you’ll need to find a card with the lowest interest rate possible, preferably 0 percent APR. Thankfully, there are many credit cards that offer interest-free promotional financing for existing debt. These offers are called promotional balance transfers. The idea is that after opening a new account, the bank will pay off your old account and transfer that balance to the new one. In addition, a balance transfer fee is almost always added to your new balance. Typically, this fee is equal to 3 percent of the amount transferred.
You then have a limited amount of time to pay off your balance without incurring interest. You still have to make a minimum payment each month, and interest will begin to accrue after the promotional financing period expires. These promotional financing offers can extend from a minimum of six months to as long as 21 months.
The next thing you need to pay down your debt is a plan. Just avoiding interest for a limited time is not enough – you need to make steady progress toward paying off your entire debt before the promotional financing offer ends. Clearly, this will involve creating a budget that reduces your expenses, increases your income, or both.
So in the end, which card currently offers the best promotional financing offer and even helps you create a plan to pay off your debt? The Slate from Chase is the only card on the market with a 0 percent APR balance transfer offer and no balance transfer fee. Once you open an account, you have 60 days to complete a balance transfer from your old account. Then you have 15 months of interest-free financing on both new purchases and the balance you transferred.
But in addition, you will be able to participate in Chase’s Blueprint program. This innovative feature allows you to create a plan to pay down your debt before interest starts to accrue. Using Blueprint’s “Finish It” feature, you will simply specify that you want your debt paid off within 15 months of opening your account, and Blueprint will tell you what payment you need to make every month to fulfill your goal.
Getting out of debt is very challenging, but it is also vital to the health of your personal finances. By taking advantage of a promotional balance transfer offer like Slate from Chase, and by sticking to your plan, you can emerge from debt and enjoy your freedom from interest payments.