I started using credit cards and applying for loans right out of high school, but was never taught how to manage money properly. Like with anything in life, if used in moderation, credit cards have some benefits.
One benefit is using credit card promotions, like balance transfers, to save money on interest and pay off your debt faster.
Utilizing a balance transfer
Right now, my only debt is my car loan, which I’m working very diligently to pay off. I’m officially debt free, but at the beginning of 2011, I had several credit cards with big balances on them (over $2,000 in total) and a car loan balance of over $10,000.
For someone like me, who only brings in $37,000 a year, that’s a large chunk of unsecured debt to owe creditors. The best decision I ever made, was to open an account with Discover and take advantage of their balance transfer deal with 0% interest rate.
I paid off my entire credit card balance within 6 months, even though Discover gave me 18 months, interest free. It was amazing how quickly my debt diminished once I changed from an average of 20% interest to 0%.
Pros to using Discover
In my opinion and experience, the Discover® It Credit Card is one of the best cards available. Here’s why I love having mine.
- 0% intro APR on purchases for 6 months, then the variable standard purchase APR of 10.99% – 20.99%*
- 0% intro APR on balance transfers for 18 months, then the variable standard purchase APR of 10.99% – 20.99%*
- Earn 5% cash back on up to $1,500 in purchases at Department Stores and on ALL online shopping. It’s free and easy to sign up.
- 5% Cashback Bonus in categories that change throughout the year like gas, restaurants, and department stores up to the quarterly maximum.
- Discover is ranked #1 in customer loyalty–16 years in a row! (2012 Brand Keys Customer Loyalty Engagement Index report)
- 24/7 access to a U.S.-based Account Manager within 60 seconds
- $0 Fraud Liability, you’re never responsible for unauthorized charges on your Discover card account, plus automatic mobile and email fraud alert options
- Great rewards with no annual fee, no rewards redemption fee, and no additional card fee
How to apply for a balance transfer
Step 1: Use the online application to fill in your personal and financial information.
Step 2: Choose from one of their custom card designs.
Step 3: Click the “Yes, I want to transfer a balance” box.
Step 4: Read over the terms and other important information. If you choose to transfer a balance, it will bring up a second page to fill in the additional information.
Step 5: Submit the application and wait 60 seconds to find out if you’re approved or not.
That’s it!
In five easy steps you can be on your way to saving hundred or thousands of dollars in interest payments. Watch more of your money go towards paying down your principle, and less of it going into the creditors pockets.
Take advantage of their $0 balance transfer fee and 0% interest rate for 18 months, before this “too good to be true” deal is gone!
Other details
Q. How long will it take to process my Balance Transfer?
A. It may take up to two weeks to process your Balance Transfer. Please continue to make payments to those accounts to avoid late fees and interest charges.
Q. Can I use a Balance Transfer to pay another Discover card account?
A. No, you may not use a Balance Transfer to pay any Discover card accounts.
Q. Do I earn rewards on Balance Transfers?
A. Balance Transfers do not earn any rewards.
Q. What happens if the balances I transferred exceed my credit line?
A. Balance Transfers, as well as purchases and cash advances, are subject to your available credit. If a Balance Transfer causes you to exceed your account credit line, you authorize us to process your Balance Transfer for an amount less than the full amount requested. Balance Transfer requests will be processed from the lowest to the highest dollar amount.
Benefits to using balance transfers
The best thing about transferring credit card balances is that, you’re simplifying your finances.
I had 5 different credit cards before I consolidated to my Discover Card. I had to keep track of 5 payment due dates and 5 transactions coming out of my checking account.
Only having 1 or 2 credit cards, decreases the chances of missing payments and getting charged late fees. Plus, it reduces the amount of time spent paying your bills, and streamlines your money. That alone is worth it!
Final thoughts
Using a balance transfer on my journey to become debt free, was a great decision. However, it may not be in your best interest if you have difficult time using credit.
If you have too many maxed out cards or have a hard time staying within a reasonable spending plan, you may want to consider another alternative.
Since paying off the entire balance of my Discover Card, I exclusively use my card to take advantage of cash back rewards, when shopping online (and pay off immediately).
Credit cards can be mishandled very easy, so be sure to utilize them properly and as part of your pay down debt strategy.
[This post contains referral links to help keep this site going. As with all the products I blog about, I use them personally and the opinions are my own.]
Photo Credit: ChargeSmart
I'm an ex-small business accountant who aims to help freelancers get out of debt and organize their life. And through the recently launched 
