Transfer Card Miracle

Lessons learned paying off credit card debt

Last year my credit card with CapitalOne was carrying a balance of $3,123 with variable APR(interest) of 23.99%. I was hardly catching up with interest rate paying $80-100 when its due, $65 of which was going toward monthly interest. My debt wasn’t going anywhere

by chipping away only $15-35 once a month. There had to be a better way to pay it off. Quick research and transfer credit card was a savior and a miracle to help pay off the debt fast and efficient.

My choice fell on American Express Blue Cash Everyday. I knew I would not get rejected, thanks to Credit Karma.  Amex card offered a promotion of 18 month no APR on purchases and balance transfers as well as no annual fee. I did had to pay a transfer balance fee initially of $65 same as I would pay every month with CapitalOne every month. It was the last time I had to  pay a fee or interest saving me hundreds of dollars. After the big transfer I was able to put down on average of $300 every month due to end of the year bonus and tax return of $800 that I immediately put toward paying off  Amex card. It was somewhat of a rough journey to figure out what and how to do including what definitely not to do.

6 Things I’ve learned to do and not to do while paying off credit card debt:

  1. DO make a budget. Essential to paying off debt and not getting into one in the first place.
  2. DON’T pay only minimum required. Sure you are putting something toward you debt, but realistically it will take you years to pay off. Take advantage of no interest rate with a transfer card and pay it off as fast as you can.
  3. DO get a transfer card. Getting rid of monthly interest even for 12 month will speed up possess of paying off debt and save you a lot of money in the future.
  4. DON’T carry your credit card and transfer card with you. Temptation to use credit to purchase will only set you back away from your goal. I’m guilty of using credit card for shopping setting me back almost 2 months. After learning the hard way and increasing my debt by almost $400 I took CapitalOne out of my wallet and I cut my Amex card in half. Amex card was a temporary solution to a debt payment plan and I never had an intention of using it for purchases anyway.
  5. DON’T use your 401k to pay your debt. Pulling money out of your 401k will cost you a pretty penny with early withdrawal penalties and cost you much more in the future when 500$ you took out could of been $5,000 in 35 years.
  6. DO make bi-weekly payments. Paying off balance twice a month will reduce a temptation of using money to buy new clothes, gadgets and so on. Out of sight, out of mind.
  7. DO pay your highest interest card first. In order to minimize interest on CapitalOne I prioritized paying it off first and only minimum payments were made toward Amex card during this time.  In few months everything was back on track and a small amount of interest was charge.

October 2017 came along and I called American Express to cancel my credit card. I payed off my balance in full and had no more need for this card. I was debt free, kinda… I was credit card debt free. One debt down as of now. Follow me on my path of leaning to manage my way through adulthood and personal finance.

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