Balance Transfer Cards 101: Everything You Need to Know

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So yesterday I was talking to a friend that got a credit card with a promotion on it, the deal was he had 18 months to pay it off interest-free. The problem is that now he owes $5500, and only has left 60 days before they charge him interest.

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1. What is a balance transfer Card
- These credits cards are designed with a special promotion to move debt from one party to the next
- And they compete with each other by giving you 12-18 months usually of free interest with those balance transfer
- Meaning the goal is to get you to move your debt from one party to the next

Why do they do this?
- Because they understand that it is very likely that you will not pay the credit card in full
- It's also very likely you will start using the card also, and potentially even get a bigger balance
- This means they will make some money from you

For example:
- My friend with the 5,500 in debt on one credit card, wants to move it over to another balance transfer card with a special promo
- So he applies and gets accepted to the Discover it Balances transfer card ( he transfer the balance and now as 18 months to pay it off interest-free)
- If he does great but if he doesn’t they will make 24% a year from their investments.

2. The Truth ( nothing in life is free and neither are these transfers )
- Of course they will have certain fees involved but the fee is better than paying a ton of money in interest
- Those fees are really just a balance transfer fee that is usually going to be around 3-5% of the balance you are transfer
- But remember this cheaper than paying 24% in interest every year

So let's go look for the Best Credit Cards:
- Citi Simplicity Card
- Discover it Balance transfer
- Citi Double Cash Card

Advice: pick a card that once you are done paying you can continue to just use with the one small method.

3. Here is Some Advice
- Use the one bill those with the credit cards and do not go back into debt
- You can also transfer Medical Bills and more with balance transfer (it's not just credit card debt )
- But you be careful because if you’re not you will get hurt

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.
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Balance transfers can help lower your interest rate, but don't delude yourself into thinking it makes your debt okay. Pay it off as fast as possible.

investinstyle-financeinves
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You forgot to calculate the fact that even if someone can't pay the full sum within the 18 month period, they can still absolutely eat away a sizeable chunk of the debt, leaving a much smaller amount leftover that can actually accrue interest, and also accrues interest at a slower rate.

The average APR still hovers around 24%, with a debt total of $5000 it would take 3 years to pay it off with a payment of $200 a month. This would mean you would also pay approx $5000 of interest.
With an APR of 0% for 18 months, we can use a simple calculation with the same payment period of $200x18 = $3600. Now the new total we have is $5000 - $3600 = $1400. Calculating the same average interest means you are paying the $1400 balance off with your regular $200 monthly payment for only EIGHT MONTHS with a total interest of only approximately $124.

The math is quite solid, SO LONG AS YOU STICK WITH YOUR PLAN LIKE GLUE.

VultureXV
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I never thought I’d needed to do balance transfers when I first got into the credit card game. But when I couldn’t find work for six months I suddenly found myself relying on my credit cards to make ends meet. Grateful to have learned about balance transfers even though I didn’t feel the need to learn because it ended up saving me ~25% in interest which I thankfully have not had to pay. Now I just have to pay those balances off so I can finally breathe again because even though it’s 0% interest until next year I don’t want to get into the habit of carrying those balances because it’ll come back to bite me in my bottom.

SreySongz
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I like how this guy provides true value and gets straight to the point! Good stuff bro!

alexle
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"Cut up the card, put on autopay and ignore the marketing" Great advice!

altonmassson
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I swear man.... EVERYTIME I look up something money related, u have already made a video answering my question. Or it's you reviewing a book I'm interested in reading... Thank you... Keep up the good work, I really appreciate it

mrrobinson
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I just got approved for a Discover balance transfer. I only have $2, 000 on my capital one card BUT its 22% so that's why I wanted to transfer it. My plan is to pay it within 7 months. Hopefully it will help my utilization and score because I have only one card my utilization looks bad.

jenniferleigh
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I don't know who needs to hear this "save to invest! You are saving a day off work"

priscajuliet
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I have a Discover It card with a 17.49% interest rate. I have two other cards with 23.xx% and 27.xx%. Since the Discover card is new I get 15 months 0% interest for purchases and balance transfers. I plan on moving the debt from those higher interest cards to the Discover card. By the time my 15 months is up I will have paid off more than half of what I moved over. The rest will be under a much better interest rate. It's also possible that in 15 months I can get another card that has 0% interest for balance transfers and finish paying off the rest without adding interest.

darkshogun
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Watch out for hidden fees on balance transfer usually 3% of total balance transfer or $10 whichever is greater. So Let's say if you have $4000 to transfer the balance from one cc to another now you could be paying 3% of 4000 = $120 but you will save on the total Balance transfer APR which is zero.

mrbazzzinga
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I got 21 months zero apr. I’m so happy. It’s definitely a blessing for me. I have about $5k and I’m very actively paying it off

mkfmgaming
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What u do is sign up for one balance transfer card. Do ya min payments, if it’s 18 months, around month 16 get a new balance transfer card and transfer what you owe over to the new card. Rinse n repeat

swiss
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Thank you, because of your video I legit applied for a discover it card and now I am doing a balance transfer. Setting it on autopay and forgetting I got it!

dolledbytan
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I just applied and got approved for the discover one, how does it actually transfer though? Does it automatically or do I have to manually put them on there

armandodeking
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Transfer the money, make the monthly payment the same as when you were paying interest on it. Pay as much extra as you can afford. Don't buy anything on credit untill everything is paid off. Put everything on auto pay. Keep track of you normal monthly expenses . Soon you will be out of debt.

UpYou-tx
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Your channel just saved me 25%! Thanks fam!

mrbriceno
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Great to hear that we can bring in other debts into it, like a car loan. That’s awesome!! Thanks for sharing that.

ThaísKnight-ko
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This was super informative and simple to understand. Thanks!

Jayyy_Wav
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I love that the way I go through credit card things is the way you go through them as well. Ignore all the bonus BS and just look at the fees that may be connected

KelechIwuaba
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The first rule is to not get into debt period. But balance transfers are a great way to pay off debt. But one has to be extremely disciplined to pay the balance off before the promotional period ends. Hit that card quickly. Otherwise back to high interest, and just ruined the point of the "balance transfer". Put this card away till you pay off the balance. They are hoping one will default.

swanradha