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

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.