# This Couple Just Paid Off \$2,000 in Credit Card Debt in a Clever Way

Jason Rogers under Creative Commons

How much interest are you currently paying on your credit card debt? Taking the time to transfer your balances to a zero-interest credit card can save you hundreds of dollars, and we’ve got the numbers to prove it.

Get Rich Slowly recently ran a post about a couple who had \$2,000 in credit card debt with an APR of 20.99%. They decided to transfer the balance to a zero-interest credit card before paying it off, and then began paying \$150 every month until their \$2,000 debt disappeared.

How much money did they save by making that balance transfer? Let’s take a look:

## 0% vs. 20.99% APR

In month one, the couple paid \$150 on their \$2,000 debt, bringing their debt down to \$1,850. Because they had transferred their debt to a zero-interest credit card, the debt remained at \$1,850.

If they had kept the debt on their 20.99% APR card, they would have accrued \$35 in interest on that \$1,850 balance. They would begin the next month at \$1,885.

With a zero-interest credit card, you can pay off \$2,000 in 14 months by making regular \$150 payments. With a 20.99% APR card, it will take you 16 months and you’ll pay \$297 in interest. (I used the credit card calculators at US Bank and Credit Karma to double-check the numbers. They’re great tools to calculate how much interest you’ll pay on your own cards.)

Let’s say they had more than a \$2,000 balance. Let’s say this couple had the average American credit card balance of \$7,327, and were making monthly payments of \$150. On a 20.99% APR card, they’d incur \$128 in interest after their first \$150 payment — and it would take nine years to pay off the card.

If you are currently carrying debt on a high-interest credit card, consider transferring your balance to a zero-interest card. You might save hundreds or even thousands of dollars over time.

## Watch for Fees and Time Limits

Before you plan your balance transfer, you need to consider fees and time limits. Some credit cards come with balance transfer fees, which means you pay for the privilege of transferring your balance — and that payment gets added on to your credit card debt.

The Get Rich Slowly couple found a credit card that did not have any balance transfer fees, so shop around and see if you can find a fee-free card too.

You also want to be aware of time limits. Many credit cards offer zero interest for a limited amount of time — say, six or 12 months — and then charge a high interest rate on the rest of your debt. If you are doing a balance transfer to a zero-interest card, try to pay off the entire balance before the zero-interest time limit expires.