Playing with the numbers to take full advantage of a balance transfer.
It’s probably no secret by now that I’m more than just a little obsessed with doing whatever we can do to get rid of our debt. This morning I scrutinized our Visa statement, which is the credit card we will use to do our next balance transfer. I want it to hit zero before taking advantage of their offer of 5.99% for life. As mentioned before, we have no intention of keeping it around for any longer than necessary. Any amount of interest paid is too much, but this offer buys us some time as we pay off other transfers with shorter time limits.
From what I can determine, statement closing dates usually fall a few days after payment is due. To be sure that the balance is indeed zero before doing any transfers, I am adding $50 to the balance to allow for added interest. Looking ahead, I am feeling confident that we can make this happen. We have a $1500 0% balance transfer in the works (already approved) and have holiday pay, vacation pay and additionally, it is a three payday month.
Another thing that hit me today is that by doing these balance transfers, we won’t have any other payment due on the two debts this will affecting. Granted this will change again as we will then use one of those cards to transfer the balance of one currently charging us 13.99% interest. Enough to make your head spin, huh?!
Depending on statement closing dates, we potentially could have all our transfers completed by sometime in October. The sooner we can accomplish all of this, the better. Yes, it takes some finagling, but it will also save us hundreds of dollars each month in interest. More importantly, we will be out of debt all the faster!
This morning I was also playing around with percentages of debt paid off. It was super encouraging to see that we have eliminated almost 21% of our debt. Not bad for just eight months! Additionally, they were eight months of crazy high interest rates! I am beyond eager to see how much faster we can eliminate our debt by getting these interest rates down to almost zero!
For those of you also battling debt, I would strongly encourage you to consider balance transfers. In retrospect, we should have done this when we began our journey. My reasoning for not doing so was honestly fear of rejection. Given how much debt we owed (and even with paying off over $11K, we still owe a lot!) I didn’t think there was any chance of being approved for a balance transfer, yet here we are, making it happen! While depending on the offer, there may be some transfer fees involved, rolling these costs could likely pay for itself in the amount of interest saved. Does it add a bit of pressure to pay off a debt in an allotted amount of time? Sure does, but this is good pressure! Worst case scenario is that we would need to do yet another balance transfer. Meanwhile, depending on the offer, we’ve taken advantage of paying no interest for a year or more.
So go ahead and take a good look at how much interest you are paying every month. Even if you don’t increase your monthly payment, think about how much more will go towards the principle by not paying horrendous amounts in interest. Also remember, the worst they can say is no, but you won’t know unless you try!
* I am in no way a financial advisor. I have done stupid with zeros far too many times to count. I write this blog to share how my Hubby and I are battling our way out of debt. The blog helps keep me accountable, and I also hope it serves as encouragement for others in similar situations.