Carrying a load of credit card debt sucks, to put it plainly. Compound interest (paying interest on interest) can make your debt grow very quickly, especially if your credit card compounds interest on a daily basis (most credit cards do).

Although Americans have collectively been able to cut down on credit card debt (Nilson Report statistic), many of us still owe a lot of money to credit card companies.

Getting rid of credit card debt can be confusing, and many of us look in all the wrong places. We try to make higher payments in hope of lowering our interest payments by cutting down our card balance. Or we take out a personal loan to refinance our debt.

But the root of the problem lies in compounding interest, which can make your debt grow just as fast (or faster) than your payments make it shrink. Getting a personal loan might help you pay a lower interest rate on that debt, but even a fair interest rate can result in a lot of money above what you actually owe.

Put A Freeze On Interest Payments!

The first step is to completely get rid of interest payments and most of all, compounding interest. After all, if you carry a balance and are paying interest on it, it's probably because you don't have money to spare, especially for down-the-toilet interest payments.

Cutting up your credit card won't help a bit here. In fact, strange as it may sound, the solution here might be to get another credit card. That's because some credit cards give you 0% introductory APR rates for a certain amount of time after you open your new card account. You should specifically look for a good balance transfer credit card, one with a 0% intro APR on balance transfers for a long period of time (shoot for 12 months or more).


Just To Drive The Point Home

Let's take a look at this example of what could happen if you did not pay off your debt fast. Let's imagine that your credit card has a 20% APR and that you carry a credit card debt of $2,764 (that's the number you would get if you divided US credit card debt in the Nilson Report mentioned above by the US population).

Even if you paid $150 monthly towards getting rid of your credit card debt, it would still take you 23 months (nearly 2 years) to pay off that debt. You will spend around $565 just on interest payments before you finally hit the black.

That's how easy it is to get heavily in debt. $2,764 may not seem like a huge amount, just a cheap vacation or a used car. Without paying interest, $150 a month should pay back the same loan in around 18 months and a half. The other 4 and a half months of payments is money down the drain.

Looking at those numbers, the benefits of transferring your balance to a credit card that gives you a long 0% introductory APR period become pretty clear. In the above scenario, you would be able to save $565 in unnecessary interest payments and get out of debt 4 and a half months sooner by taking advantage of a 0% introductory APR offer on balance transfers for 18 months or more.

Are There Other Solutions?

Aside from not carrying a balance in the first place, or getting a friend or relative to give you an interest-free loan, a balance transfer credit card provides the only way to enjoy 0% interest for such a long period of time.

Of course if you don't pay off your debt by the end of the introductory APR period, you will pay interest as well. That's why you will want to do everything in your power to pay off that debt within that intro APR period. Once you've paid off your debt, take steps to avoid slipping into it again. One of the best ways to do this is to spend only what you can afford to pay back in full before your credit card's due date.

Here are some of my favorite credit cards for balance transfers to help you beat your debt once and for all:

Credit CardFeaturesIntro APRRegular APRAnnual FeeWhy we like itWe least likeCredit RequiredRelated links
Chase Freedom<sup>®</sup>

Chase Freedom®

APPLY NOWAt Chase's secure website
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • Unlimited 1% cash back on all other purchases – it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.74-25.49%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
  • No annual fee
  • Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
  • Free credit score, updated weekly with Credit Journey℠
APPLY NOWAt Chase's secure website

0% Intro APR for 15 months from account opening on purchases and balance transfers

16.74% - 25.49% Variable

$0

Why we like it
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter. Unlimited 1% cash back on all other purchases - it's automatic.
Excellent/Good
BankAmericard<sup>®</sup> credit card

BankAmericard® credit card

APPLY NOWAt Bank of America's secure website
  • 0% Introductory APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 14.74% - 24.74% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers
  • No annual fee
  • No penalty APR. Paying late won't automatically raise your interest rate (APR). Other account pricing and terms apply
  • Access your FICO® Score for free within Online Banking or your Mobile Banking app
APPLY NOWAt Bank of America's secure website

0% Introductory APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days

14.74% - 24.74% Variable APR

$0

Excellent/Good