Transferring Credit Card Debt to Another Card and Again

Courtesy of Alex Young

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With more $107,000 in credit card debt, Alex Young (33) and his wife, Alexandria (31) turned to balance transfer cards in 2018. Only not but one; the couple made multiple balance transfers at once — which led to months of financial sacrifice and strict budgeting to pay down balances before interest kicked in.

The Youngs accumulated their debt over time, thanks to full general overspending, a price of living that was higher than they could afford, and lack of financial noesis. But they eventually reached a point where the debt became insurmountable, Young says. In March 2018, they decided to tackle the loftier-interest debt, and opened multiple rest transfer cards in April.

"I call back we opened a total of about eight cards within an afternoon," says Young, who works as a Realtor in the Green Bay, Wisconsin, area. This allowed them to transfer their unabridged debt residuum across several cards with introductory 0% APR offers. And so, they strategized paying off as much as they could within the introductory periods that ended effectually the same time.

"That felt so uncomfortable — incredibly uncomfortable. All suddenly, we had a bunch of new credit inquiries and balances that were available," Young says. They too had to come to terms with the sacrifices a plan like theirs required; they'd surrender a number of experiences and celebrations to pay down the debt. They had to forgo vacations and birthday celebrations to pay off thousands before the 8 introductory periods ended in 18 months.

While the Youngs' experience is an extreme example, balance transfer cards tin can be a keen mode to consolidate high-interest credit card debt while avoiding additional interest charges. While information technology is possible, experts say about people should avoid using multiple new balance transfer cards at the aforementioned fourth dimension.

For starters, high monthly payments you'll demand to pay off so many balances in a limited time tin can be a huge financial burden. Applying for and opening multiple new credit cards at once tin also hurt your credit score. Even the Youngs admit they made many sacrifices, had lower credit scores, and worked within a strict budget to put every actress dollar toward their debt.

If y'all've got loftier-involvement credit bill of fare debt to pay down, here'south what you demand to know virtually the risks and considerations of using multiple balance transfers at once, and how information technology can affect your credit.

Can Y'all Make Multiple Rest Transfers?

Every bit the Youngs' example shows, information technology is possible to make multiple rest transfers at the same time. Merely that doesn't hateful information technology'south a adept idea.

In full general, the corporeality transferred (including the balance transfer fee) cannot exceed the card's credit limit. If you are intent on using multiple residual transfer cards to avert paying involvement charges, you could be left with very high monthly payments to ensure you pay information technology down before rest transfer promotional rates end.

The Youngs experienced this when they had to contain larger monthly payments than they'd allotted for in the past. The couple kept a strict monthly budget and kept track of everything while contributing as much money as possible toward their debt. They too kept a spreadsheet of each menu's residuum and date that the promotional offer concluded to keep them on track.

"We kept track of everything down to Netflix subscriptions or monthly subscriptions for music. We cut as much frivolous spending as necessary, and and then found other means to increase income," says Young.

So if you lot plan to utilize multiple residual transfer cards to consolidate debt, be prepared to make very large monthly payments to pay downwards multiple balances before the intro periods end. Otherwise, each of those cards will brainstorm to accrue interest on the remaining balance and you'll end upwards back in the debt cycle.

Balance transfer fees are some other thing to consider. Most rest transfer cards charge 3% to 5% fees on each transferred remainder. And the fees can speedily add together upwardly — particularly if you're transferring multiple balances from dissimilar cards. Remember to factor the balance transfer fee into your budget and your carte's limit.

Risks of Multiple Balance Transfers

While information technology is possible to pay off debt with multiple remainder transfers like the Youngs, experts warn against it.

If you're doing a balance transfer, it should be used equally a ane-time lifeline to get out of debt instead of repeating the cycle, says Terry Brutal, writer of "The Vicious Truth on Coin, Markets, and the Economy."

Opening several lines of credit to transfer balances can have a major impact on your credit score. Particularly if you're opening multiple lines of credit inside a short timeframe, the new accounts and new inquiries can negatively impact your credit.

Instead, use a balance transfer card as a strategic tool in your overall debt payoff plan. If y'all have a debt balance that exceeds what you lot can transfer to one card, consider waiting to pay off one balance transfer card's balance earlier opening another card to brand sure yous tin can pay off i rest instead of multiple at one time. And if your debt is very high, a balance transfer can assistance you pay off a portion of the debt in conjunction with other methods, similar a debt consolidation loan or payoff techniques like snowball and avalanche.

Consolidate Multiple Debts with a Residue Transfer

In general and when possible, a ameliorate bet for consolidating debt is to transfer balances from multiple cards to one balance transfer card, says Jim Triggs, President and CEO of Coin Management International, a nonprofit credit counseling organisation. Simply it depends on the carte du jour issuer and the card limit you're approved for. You may be able to transfer all of your debt to one card to pay your remainder off interest-free.

But if your debt exceeds one residue transfer bill of fare's limit and you lot desire to apply multiple balance transfer cards to consolidate and pay off debt, you may choose to gradually open up another menu over time to pay off the balances instead of facing a huge financial burden of steep payments that you may not be able to comfortably pay.

Make a Plan to Pay Off Your Balance Transfer Ahead of Time

The Youngs took a hazard past making several balance transfers at once, only some of the debt payoff tricks they learned forth the way tin help you in your journey.

First, they prepared. When Young and his wife started paying off debt, they created a spreadsheet of outstanding balances, interest rates, and length of each promotional period. They too increased the amount of money they could dedicate toward debt payoff each calendar month — Young was able to increase his real estate clientele, and the couple created a strict budget that cut every bit much frivolous spending every bit possible.

"We've had to forfeit getting together with friends and family unit, doing trips, and giving gifts on birthdays or holidays," Young says. While information technology wasn't an easy determination, Young says they were willing to sacrifice in the curt term to pay off the debt as rapidly equally possible. "We were merely very fortunate to that we were able to go through a lot of information technology in a relatively brusque menses of time considering how long it took to accumulate to brainstorm with."

Before applying for a balance transfer menu, create a programme to pay it off within the introductory menstruation ahead of time — so you can avoid the demand for multiple rest transfers birthday.

Later on all, balance transfers are great as long every bit they're used to go out of credit carte debt, not just to tread water by merely paying the minimum payments and non creating a plan to pay the debt off — a risky move that accrues interest and leads to more than credit card debt, says John Ulzheimer, a credit proficient, formerly of FICO and Equifax.

Triggs recommends using a residual transfer calculator to approximate how much time you'll need to pay the balance transfer and your monthly payments. As you calculate how much you're able to pay in monthly payments, consider ways you can refine your budget:

• Consider whether a side gig or office-fourth dimension job is an option for additional income.
• Reduce your spending on streaming services and entertainment.
• Utilize coin from your savings towards your debt.
• Trim your budget to encompass the essentials.
• Look for savings on bills — like electricity, water, monthly subscriptions, and cell phone services.

Some other thing to consider is how you took on the debt to start with. If yous continually find yourself stuck in a cycle of debt, or your take a very loftier remainder that seems insurmountable, consider seeking help from a nonprofit credit counseling agency to evaluate your options — such as a personal loan or debt management programme.

"Ultimately, if you go along to transfer balances and information technology has to do with the minimum payment beingness difficult to brand, then you might want to reach out for assist and meet if there's other help bachelor for you," Triggs adds.

Best Remainder Transfer Cards Correct At present

Citi Simplicity

The Citi Simplicity® Credit Carte du jour has an introductory 0% APR for new purchases for the outset 12 months, just a longer introductory period of 21 months for balance transfers after business relationship opening. There's a variable APR of 14.99% – 24.99% after that. In social club to qualify for the introductory flow, you must make the remainder transfer within the first four months.

The card doesn't have an almanac fee, late payment fees, or penalty Apr. Still, there's a 5% balance transfer fee or $5, whichever is greater.

Wells Fargo Reflect

The Wells Fargo Reverberate℠ Credit Carte has a 0% intro Apr for purchases and qualifying balance transfers for 18 months from account opening. In that location's a variable APR of 13.74% – 25.74% thereafter. If yous make on-time payments during this time, y'all may qualify for up to three additional months with 0% intro APR. In order to authorize for the promotional offer, yous must make the residuum transfer within 120 days of days of account opening.

The card doesn't have an annual fee, only you can expect a 3% balance transfer fee (minimum $five). Afterward the introductory flow, it increases to 5%.

Citi Double Cash

The Citi® Double Cash Bill of fare has an 18 month introductory 0% APR period for balance transfers. The transfers must be made within the beginning four months of account opening. After that, you can expect a variable APR of 14.24% – 24.24%.

There's no annual fee for this card, just information technology comes with a 3% balance transfer fee ($5 minimum) during the introductory menses, so increases to v% for each transfer.

U.S. Banking concern Visa Platinum

The U.S. Bank Visa Platinum Card has an introductory 0% APR for the commencement 20 billing cycles after account opening for both new purchases and balance transfers. Balance transfers must be made within 60 days of business relationship opening to authorize for the promotional offer. Later on the introductory period ends, you can expect a variable APR of 15.24% – 25.24%.

The carte du jour comes with a balance transfer fee of 3% or $5, whichever is greater.

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Source: https://time.com/nextadvisor/credit-cards/can-you-make-multiple-balance-transfers/

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