The Problem With 0% Interest Debt On Balance Transfer Cards

Let's say you owe on your credit card right now $5,000 and the card is basically maxed out and you paying 25% interest and you’re paying each month about $100 as minimum payment. Is it okay to move that debt to a balance transfer credit card if they are going to charge you 0% interest, or should you keep it where it is?

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1. What is a balance transfer card
- A balance transfer in my normal terms
- Is a card that is designed to transfer debt from one place to another place
- And the company that offers these cards, benefits because they 3% upfront, and most people will not be paying off the balance in full, and you can also potentially get other products that the company offers

The customer likes it
- Because for 12 months to sometimes even almost 2 years
- You get to try to pay off your debt without having to pay any interest ( that’s huge )

2. What is the problem with this
- The problem is that the people that usually have to take advantage of these deals
- Have an underlying issue which is bad money management
- And whenever they transfer the balance from one credit card to the next, effectively they just open up a new line of credit basically

some folks:
- Use the old line credit to get into more debt
- And then don’t even pay off the new one they have in period
- And they end up just getting into more debt

3. People that take advantage and the correct way to do it
- First set a goal a realistic one
- Once you’ve transferred the balance close the credit card to prevent going into more debt
- Don’t use the new card for anything just make automatic payments

Realistic Goal:
- Divide the amount of money you owe by the amount of money you have been giving to pay this off interest-free
- So $5,000 divided by 238 dollars or so
- If that’s not doable lower the number or a little, if you can do in less time then even better

Close the Other account:
- If you’re old credit card now has a zero balance or small one, pay it off first and then close it
- This way you don’t get stuck increasing the balance

Don’t fall for the trick
- A lot of these cards come with purchase offer also, of 12 months
- So they give you a line of $7,000 and you transfer 5k from debt
- They will let you buy things with that 2k and not pay interest for 12 months
- But then you’ll be in a deeper whole
Tip: the goal is to be debt-free

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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.

[Emily_CM]

Nope! Hide it in the drawer. Do NOT close the first card.

[samsmom]

You nailed it exactly. ONLY please, don't close your CC accounts. That will hurt your credit. Turn them OFF and make it harder to use. Don't keep your CC information on any of your online shopping stores, it's too easy to go in and buy something. Make it HARDER to use the CC, but don't eliminate them. Eventually, especially as you have children and getting older, emergencies WILL come up. They will exceed your savings. You want to have a credit line available. Every once in a while, charge something really small on the CC's you're not using to show they are still active. Even if it's just a candy bar that you pay off. Pray and ask the Lord to help you with your money. I did. He has helped me. Thank you for your excellent information!

[josephfriedrich]

Cc a: 10k balance, 18k credit limit, 29% apr.(200 a month in intrest)
Cc b: 0 balance, 25k limit, 0% apr for 12 months(25% standard apr after), 3% transfer fee.
Not only would I be saving on intrest, but also my overall utilization lower.

[rangeles]

So initially you didn’t have the discipline to control spending; but at the end you learned from ur mistakes and was successful with your credit future. 🎉👍🏽

[RedDragonProtection]

So what you're really saying, is yes it's a good thing if you are responsible. It's not a bad thing unless you make it a bad thing.

[adrianesqueda]

I would be interested in seeing a video of the best balance transfer cards! You made this video just in time as my lady and I were think of doing this. I really appreciate the great video. Keep them coming!

[bdailey]

Not good advice, if you get a 2nd credit card leave the 1st one open that's been open for awhile. If you close the 1st one then it's going to lower your FICO score cause your average credit history length is lowered.

[Imhim]

You have the best advice on making money work for you. Thank you brother🤑😃

[the_yb]

Kudos, you earned a subscriber with this <3

[andrew.chukwu]

What did you buy? I've used credit cards for 0% property deposits/investments - usually able to refinance to pay the card back or use rental income. Got enough cards and cash - been rotating on 0% for nearly 20 years investment profit around 750k.

[javiervaldivia]

that's true but man you got to be responsible with your payments if not, you're screwed. 0% APR is the best option to take advantage of if you know how to manage your finance.

[RaceMentally]

I literally just got $200k in credit cards thinking I could put those to my car notes so I can have 0% and transfer them after so many months/years. Im confused if I can do this so my 3% current auto loan would be 0% for 15/18/21 months and then do it again after that’s up. Is this possible?

[kkutube]

What if I put a charge the transfer on that 0 interest card. When I send payment, does it pay off the charge 1st?

[drjsantosable]

Need advice, I got $25k in credit card debt with payments of $1000 at 30% interest, on track to pay it off in 3 years, is it smart to take out a 401k loan and pay it off and bc I get to pay myself 8% interest I can shave off 1 year 3 months and be done in almost half the time for about the same payment amount? My credit is not good so I can't transfer to a 0% credit card, thanks!

[ygbodybuilder]

If do e the right way you can go years doing balance transfers with using your own money and paying no interest

[basicprogrammer]

This is good advice for people who are wreckless and can't manage their finances.

This is bad advice for people who are in temporary hard times, like going through a divorce.

My question is this:
How on earth are people getting massive loans who don't make any money?

[nuke]

didnt want you to be stuck at 666 likes thanks for the info and better understanding of the balance transfer credit card

[CJDREAMSFOUNDATION]

I have 2 bank loans (a little over $2000 total) I used them to pay off credit card debt. Then maxed the card again. Now I’m unable to pay any of them. How can I fix this?

My bank has been paying them stagnantly with a portion of my direct deposit biweekly. But I really want to pay everything off soon.

[simona]

I just got that card for balance transfer.

[GlennGrahl.official]

That's the worst advice ever never close a credit card unless you never want to use that card again because if you do it's going to affect your score