A trick to get around the infamous balance transfer fees

Lots of credit card companies offer products that feature a promotional offer for purchases and balance transfers at 0% APR for a period of time, usually 12-18 months. These offers are good if you have a lot of credit card debt at a high interest rate that you are trying to pay down. Unfortunately, most if not all of these offers also come with a balance transfer fee, which is usually around 3% of the entire balance transferred. Granted, you could be currently paying let’s say, 12% interest, and if you pay this 3% fee, you will still come out ahead 9%, but there is a way around this 3% fee if you get creative.

To do this, apply for a credit card that offers a 0% APR on purchases and balance transfers for as long as possible. The Discover it card currently has one of these promotions going on. After you are approved for the card, do not transfer any balances from your old card, or you will pay the 3% fee. Instead, start paying everything you possibly can with your new 0% credit card for all purchases. When the bill comes, pay only the minimum amount due (since your purchases do not accumulate any interest for over a year) and instead, redirect as much money as you can towards paying your old, higher rate interest credit card.

Following this strategy and depending on the amount of your credit card debt, after a few billing cycles you will have “transferred” all your debt to the new 0% APR card without paying the 3% fee, and you can start saving money to pay off the purchases when the 0% rate expires. You will save a ton of interest in the process and you can use that money to pay down your principal and start moving towards having no credit card debt.

You can apply for the Discover it card here. The card also comes with 5% cash back in bonus categories (currently restaurants and movie theaters) on a quarterly basis.


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