Paying a credit card with another credit card: some strategies explained!
Consolidating Credit Card Debt with Balance Transfer Offers
For those looking to manage high-interest credit card debt, balance transfer offers can be a valuable tool. These offers allow you to move your existing balances onto a new credit card with a low or 0% introductory APR on balance transfers. This way, you can pay down debt during the promotional period without accruing interest, potentially saving money and simplifying payments into a single monthly account.
One such card is the Citi Double Cash Card, which offers 2% cash-back on everything, as well as benefits such as digital wallets, access to Citi Entertainment, contactless payments, zero liability on unauthorized charges, and 24/7 customer service. The Citi Double Cash Card also provides an introductory 0% APR on balance transfers for 18 months, followed by a variable APR. However, it's important to note that there is an introductory 3% balance transfer fee ($5 minimum) for balances transferred within the first 4 months of new card opening, and a 5% or $5 fee thereafter, whichever is greater.
To take advantage of balance transfer offers effectively, follow these steps:
- Find a suitable balance transfer credit card. Look for a card with a 0% introductory APR for an extended period (e.g., 15 to 21 months) on balance transfers. Cards like the Citi Simplicity® Card offer 0% APR for up to 21 months, while others may offer 12-18 months zero interest on transfers.
- Check the balance transfer fee and terms. Typically, there is a fee (usually 3%-5% of the transferred amount), so calculate if the interest savings outweigh this cost. Some cards—and in rare cases like BECU—may waive this fee, but watch for conditions such as time limits on initiating transfers.
- Apply for the card and initiate the balance transfer by either:
- During application, selecting to transfer existing debt, or
- Using the card issuer’s online portal or customer service to provide details (account numbers, amounts) of the debts you want to move.
- Wait for the transfer to complete, which can take a couple of weeks. The new card issuer pays off the old card(s) directly, then your consolidated debt balance appears on the new card with the low-interest terms applied.
- Focus on paying down the balance during the 0% APR period to maximize savings. After the introductory period ends, the APR reverts to a higher variable rate, so aim to clear as much debt as possible before then.
Remember to avoid accumulating new debt on either the old or new cards during this time. Use any available cash-back rewards on the new card (if offered) to accelerate payoff. Monitor your credit score to ensure you meet eligibility criteria and do not adversely affect your credit profile by applying for multiple cards simultaneously.
Balance transfer offers are a popular tool to consolidate credit card debt because they often offer lower or zero interest rates temporarily, allowing for faster debt reduction compared to making minimum payments on high-interest accounts. Other cards, such as the Edward Jones Business Plus Mastercard, offer rewards structures that can help you earn points as you pay down your debt.
[1] https://www.nerdwallet.com/blog/credit-card-rewards/balance-transfer-credit-card/ [2] https://www.investopedia.com/terms/b/balance-transfer.asp [3] https://www.nerdwallet.com/blog/credit-card-rewards/citi-double-cash-card/ [4] https://www.creditkarma.com/credit-cards/i/balance-transfer-credit-cards/ [5] https://www.nerdwallet.com/reviews/credit-cards/becu-visa-platinum-credit-card
- In addition to managing debt, some balance transfer credit cards offer rewards, such as cash-back or points, for regular purchases, providing an extra incentive for using the card.
- For businesses seeking to consolidate their financial portfolio, credit cards like the Edward Jones Business Plus Mastercard can offer not only balance transfer options but also rewards that help accumulate points as you pay down debt.
- Stay informed about the latest news and trends in the financial sector, including those related to credit cards, by following reputable financial news sources such as Investopedia.
- Maintaining good health is crucial for overall well-being and productivity. To learn about the latest health-related news, consider subscribing to health-focused news outlets or lifestyle magazines like Men's Health or Women's Health.
