One of my main goals for 2017 was paying off all my credit card debt. This didn’t quite happen, but I’m on my way at least. Part of my strategy for this actually involved opening a new Discover credit card that had a great deal on a transfer balance.
I wasn’t ever taught a whole lot about credit cards. I knew they weren’t necessarily bad, but it was easy to get into trouble. It was easy to overspend. However, I knew I couldn’t build credit without having a credit card. I was probably around nineteen when I got my first one. Ever since then I’ve had a pretty steady history of having some debt, but not a ton of it. In 2016, I knew I wanted to get serious about becoming debt free. I was reading a lot of the Broke Millennial, a blog about financing for our generation. (Fun Fact: that was part of my inspiration for Twenty Something in Orlando!) The author explained how she actually has multiple credit cards, because she uses them for the cash back you get when you spend. She never goes into debt and never grows interest because she pays it off in full every month, but she actually pays less than she really spent. I wanted to try that! Plus, I learned there was this thing called a “Balance Transfer” I had literally never heard of that allows you take the balance of one credit card and put it on another one. A lot of cards have a 0% interest rate on transfer balance for a certain amount of time, which would give me time to pay off my debt without earning more interest.
I spent a few weeks doing some research. Then a few weeks turned into a few months because I kept chickening out of opening a new card. Did I really want to take that hit on my credit? Finally, in April I was ready to pull the trigger. I had researched a bunch of different cards on Nerd Wallet, and found one that I liked the perks. Ironically it has a really annoying commercial I hate, but hey, the Discover It Card is still great.
My first concern was find a card with no annual fee. I’m not going to pay you extra for using instead of my bank. The next concern was how long I would have to pay off my debt, and the Discover It Card gave me a whole fourteen months to get everything together. On top of that, when I finally get to the point I can use the card for real, I’ll earn 1% cash back on every purchase and 5% on certain purchases. They have different offers every three months. Right now, it’s 5% back on Amazon and Target purchases, in January it’s gas stations. The cherry on top is that will match all the cash back I earn in the first year when I get to my anniversary date. Pretty cool, right? Too bad I’m not really using the card yet! Okay, I have used it, but it seemed like getting the 5% back made more sense than not getting it. The good news is they’re not charging me interest on purchases until I hit fourteen months! The only downside to the whole thing was the 3% charge on the amounts of the transfer balance, but that was way less than my monthly interest fee on those cards was.
There was one slight flaw in my plan. When I applied for the card, I entered in the two cards I currently had debt on for the Balance Transfer. When the card was approved, the balances weren’t on there so I applied again.
Big mistake.
About a week later I found out my two current cards had been over paid, and I was getting checks for the overage. My Discover Card now had double the previous amount of debt I had on it. Whoops. The Discover customer person I talked to suggested putting the cash straight into paying off the cards. I did not do that. I bought my camera instead… Look, I already had the money interest free, that gives me a whole fourteen months to take care of it!
Now it’s closer to six, but I’m still confident I can get this taken care of in time. Hopeful at least. Stubborn if nothing else.
So, what do you think? Would a balance transfer to a card with no interest help you get your debt under control? You can join Discover here and give it a try! You’ll get a $50 credit after you join! (Plus, you’ll be supporting Twenty Something in Orlando while you’re at it. I get a credit if you sign up! Win win for everyone!)
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