It is no secret that I am a strong believer in cash and use my envelopes religiously. However, there was a time when I was in debt and some of that debt was in the form of a credit card. I know this is the case for many people who are in debt.
While I do not usually promote using credit cards, there is a time when I truly believe that you can use them to help yourself. I would do this only during the time that you are in debt.
If you have credit card debt, you are probably paying, 12%, 18% or even more in interest payments. If you can find a way to transfer your balances onto a card which offers 0% interest, you can potentially save a lot of money. You will want to review the fine print and know the following before you sign up:
- How long will the introductory offer last?
- When the reduced rate ends, what rate will be charged?
- Will the new rate be retroactive to the initial transfer balance or simply applied to the remaining balance?
- Are there any annual or hidden fees?
You can use these types of offers to your advantage. You can move from offer to offer, and not have to pay any future interest on your balances. It can be very helpful and savvy, if you do so the right way. The only thing I caution is to transfer that balance prior to the end of the introductory period, so you do not have any residual interest payments.
Outside of this reason, I do truly believe that credit cards are over rated – unless used wisely. If you pay them down ever month, then you are smart with your money and they probably work for you. If you have debt, why not look into finding a good transfer rate to help you get ahead and perhaps, pay down your debt!
Just remember that you should not use the credit card and rack up more debt (that doesn’t help you at all). Instead, just transfer the balance and enjoy paying little to no interest (which can really rack up the savings).