Why I’m Considering a Balance Transfer Card to Pay Off My Travel Card Debt

I’m still a fairly recent graduate and I continue to plod along through the post-graduate journey. I applied for my first credit card (reluctantly) when I was a sophomore in college, and it was the Discover It® Chrome Student Credit Card. I didn’t know much about a la carte and was wary of it, to say the least. As the child of a first-generation credit user, I didn’t trust credit cards in general and quickly relegated that student card to a “hardly ever use” category.

However, as I got older and started my career in personal finance (covering credit cards, no less), I learned important information that completely transformed my view of credit cards. The more knowledge I gained, the more prepared and excited I was to start looking for the next card I would apply for. The second map request would be the first map that I fully understand. Instantly, I set my sights on travel credit cards.

My first travel credit card

For me, the best thing about getting a college degree was the freedom I found. As my friends and I dispersed to various parts of the country to start jobs, higher education and more, the opportunity to see so many new places seemed endless. So why not earn travel rewards on all those trips and more? Armed with new knowledge about credit cards in general, but more specifically about how travel credit cards work, I started shopping for my first travel credit card.

There were a few things I kept in mind when choosing my travel card. I knew I wasn’t loyal to any particular airline, so a co-branded credit card wasn’t high on the list. I also knew that while I had plans for the near future, realistically my travels would become less frequent over time. I was aiming for a card that had decent short-term value (an easy sign-up bonus), travel rewards that I would accumulate on daily purchases, and no annual fee. At the end of my research, I checked all of these boxes with the Capital One VentureOne Rewards credit card.

I was approved quickly and earned the sign-up bonus easily, thanks to a quick trip home for the holidays. In the first few months with the card, I went back to my alma mater several times, visited friends in California and New York on back-to-back weekends, went to a friend’s wedding college in their hometown and have traveled to my own family home more than once.

Needless to say, I quickly built up a large balance and am one of at least 60% of people who have been in credit card debt for at least 12 months. Now that my travel frequency has stabilized as planned, I try to pay off this balance as quickly as possible for several reasons.

How I plan to pay off my travel card debt

As the odds of a recession increase and interest rates continue to rise, now is the best time to focus on paying off high-interest credit card debt. Also, as a recent graduate who has benefited greatly from the suspension of student loan repayments, the impending end of this program has me taking a hard look at my budget. One tool that helps consumers pay off their high-interest credit card debt is a balance transfer credit card.

This type of credit card allows consumers to transfer a credit card balance from one account to another with zero percent interest for a specified period. You will also pay a fee to complete a balance transfer (usually 3 or 5% of the transferred balance). The biggest benefit of a balance transfer card is that it can save you a bit of interest by buying you time to create a plan to eliminate as much debt as possible during the intro APR period. . Here are some steps I take as I prepare to complete a balance transfer.

1. Pay off as much of the current card balance as possible

When I manage to complete my balance transfer, I want to transfer as little balance as possible. The lower the balance transferred, the lower the balance transfer fee added. Also, by transferring less, I would be able to pay off the balance faster and improve my credit rating by reducing my credit utilization rate. I plan to pay off as much as possible before making my transfer by paying well above the minimum payment on my travel credit card as often as possible.

2. Establish a repayment game plan

It’s best to get a balance transfer card knowing a few key details, like how long you’ll need to bring the balance down to zero before the end of the card’s introductory APR period. Plan how much you want to pay for your debt each month and start setting aside some of that money before you begin the transfer. Also, don’t forget to factor in the card’s balance transfer fee and set aside some funds to pay for this additional cost as well.

3. Compare balance transfer cards

Once you’ve established your repayment plan, research the best balance transfer card to meet your goals. Some cards will have different introductory APR period lengths, balance transfer fees, and ongoing APRs that you’ll want to be aware of if you end up with a balance after the introductory period ends. Choose a card that best fits your personal repayment schedule to maximize its value.

The Best Balance Transfer Cards I’m Considering

Although I’m not quite ready to transfer my balance just yet, there are a few balance transfer cards that I’m strongly considering using when the time comes. There are three main features that make up the best balance transfer card for me: the longest introductory APR period available, an introductory APR period on purchases, and no ongoing rewards program.

Citi Diamond Preferred Card: Best for Great Credit

The Citi® Diamond Preferred® Card has one of the longest introductory APR offers on balance transfers, with a zero percent APR for 21 months (and then 15.99% to 26.74% variable) . You can eventually be approved with good to excellent credit (a FICO score of 670 and above) and can focus on paying off without the distraction of trying to earn rewards because there is no rewards program. The current APR is also on the lower end of today’s average credit card interest rate, which could be a plus if you have a balance.

BankAmericard Credit Card: The Best No Penalty APR

In addition to hitting all my favorite card features (a long introductory APR on balance transfers, an equally long introductory APR on purchases, and no rewards structure), the BankAmericard® credit card also adds the added benefit of not charging an APR penalty if you miss a payment. Be careful, missed payments will always have a negative impact on your credit. This card will get you an introductory APR of zero% on balance transfers and purchases for 21 billing cycles (then 14.99% to 24.99% variable).

Citi Simplicity Card: the best with no late fees

Like the BankAmericard, the Citi Simplicity® card ticks the boxes while providing an added benefit. This card will not charge late fees if you make a late payment, although you may still be affected by an APR penalty and a drop in your credit score. The card has an intro APR of zero percent on balance transfers for 21 months (then 16.99 percent to 27.74 percent variable).

The bottom line

During my post-college life, I learned a lot about my financial goals and the best ways to achieve them. I’m glad I took the plunge and applied for my first travel credit card and I’m glad I used it too. I have confidence knowing that there are tools designed to help me manage my debt effectively, so I can continue to live my life the way I want. The same can be said for you, as long as you play your cards right.

About Joan Ferguson

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