The main reason I say no is because your credit card debt transfer can be used as a crutch and prolong your debt repayment.  In the end, it will actually send your debt higher.  It’s kind of like saying, “I will pay off this furniture within 90 days, so I might as well take advantage of the same as cash offer.” 

Studies show that about 80% of people do not actually pay off their balance within the 90 days.  The same applies for credit card debt transferring.  Once the teaser rate of 3-6 months is gone, you are left with, likely, a larger interest rate than when you began.  In addition to the larger interest rate, you may have to go back and pay the larger rate for the last 3-6 months.  Just typing these rules makes me angry.  I hate this game!  Be careful, read the fine print, and get out of credit card debt as soon as possible so you don’t EVER have to deal with this situation again.

I need to take a breathing time out now.  (Take ten deep breaths.  I am picturing myself lying in the sun on a beach. I am weightless now.)

Ok, I think I’m ready to be nice again.

Another reason I say no to transferring your credit card balance is because you are on a mission to get rid of this credit card debt as soon as possible with your Red Level Intensity.  If the debt will go away within the next 12 months, why waste your time and headache transferring the debt over and doing all of the required paperwork?  Instead, just knock the debt out and be done with it. 

If you are positive that you are in the 20% of people of who actually pay off the card in time, you may proceed with a credit card transfer pending you follow the 3 rules of transferring your money. 

1.   Make sure it’s worth your time.  If you go through with the trouble of transferring your balance, please make sure that the money you save is worth the time and effort.  In fact, you must run the numbers via the provided Excel Spreadsheet to find out exactly how much money in interest a transfer would save you.  For instance, let’s say you have a $1000.00 credit card balance and are currently paying 10%.  You get an offer for 3%.  If you are paying $200.00 per month, you will learn by using the spreadsheet that you would only save a total of $18.20 for transferring your balance.   I wouldn’t waste my time and effort. 

Credit Card Transfer Sheet

If, however, you have a $5000.00 balance, you are paying 20%, and are paying $500.00 per month, and this same deal comes along, the numbers look different.  Here you would same $445.26 in interest.  This is almost a full month of savings.  Be careful that the 3% runs for at least the duration of your payoff timetable.  Otherwise, your new credit card company will start to pull the aforementioned dirty tricks and I will have to go back to my unhappy place. 

1a.   The money you save on the interest goes directly to paying off the credit card debt.  If you are saving $500.00 in interest over 5 months, add the extra $100.00 to the payment.

2.     Have a written plan to pay off your credit card debt.  You should already have a monthly budget written out and have a plan set in place on how you are going to eliminate this debt. 

3.    Promise that this will be the only time you transfer your balance.  You only get one time to do this.  Do not make it your full time job transferring your credit card balance from one teaser rate to the next. 

If you promise to follow the 3 Rules of Transferring money and it makes sense, you can transfer your money to the teaser rate.

In the end, regardless of which direction you take (transfer or no transfer,) the end goal is the same: Get out of debt as soon as possible and never go back!  

Please keep sending your questions/concerns/suggestions/victories.  We love hearing from you.

This is an excellent question and first of all, awesome job on the buffer of $800.00!  This hunk of money will follow you through each simple step and get you where you want to go, financially speaking, very quickly. 

Under some circumstances, I would say go ahead and sell your company’s stock.  In most cases, I would advise you to hang on to this stock and stay focused on paying down the debt with your $800.00 buffer money. 

The only time I would say ‘sell’ is when your company stock options carry a considerable portion of your overall  portfolio (more than 10%.)   Even then, I would add those proceeds to a retirement account.  If you decide to sell, you should consult your stock option custodian or your accountant on the tax implications. 

I ran the numbers, (did you think this answer would come without an Excel spreadsheet?) and the benefit of $1000.00 would shorten your payout time by about 1.5 months and save you about $125.00 worth of interest.   Though these benefits are nice, I would prefer to keep the $1000.00 where it is. 

I would, however, use your tax refund to pay down your debt.  There will be a day when your tax refund can be used for more ‘fun’ things, but right now you are in the red intensity zone.   Take the whole refund and apply it to your debt.

Also, the same applies if you are getting a bonus from your employer (in my best Napoleon Dynamite voice, “Lucky!”)  If you are in the red intensity zone, apply this directly to your debt.  

Keep up the intensity and the buffer zone.  Great things are in store for you.

1. Your credit card debt holds no value to you and your family.  At least you have a car to back your car loan, and even an education to back your student loan.  No, your memories from your trip to Europe that you put on your credit card hold no value to you and your family.
2. The interest that you are paying on your credit cards is making you poorer and poorer.  Most often, it’s the interest, late payment fees and additional interest that is crippling people, not necessarily the balance. 

If you have a variable interest rate, you should be even more motivated to pay your credit card off completely.  If you are paying 10% today, while the fed rates are at 0-.25% (essentially the rate at which your bank or credit card company can borrow money) do you think your variable interest rate is going to go up or down in the future?  You better pay it off now, because the rate you are paying is as low as it’s ever going to be. 

Can I negotiate my credit card rate?  Should I?

The answer: Yes and it depends.   Negotiating your credit card rate depends on whether or not it is really worth the time and hassle to do it.  Remember, the idea of this step is to pay off credit card debt as soon as possible.  If you are on track to pay off your cards in 3-6 months, it’s not worth your time to transfer your money or to call and get your 10% rate down to an 8% rate.  Your savings don’t outweigh your troubles. 

However, if you have a considerable amount of credit card debt (more than $5,000), your interest rate is over 10%, and it will take over a year to pay off based on your monthly bills and buffer zone, you may want to look at this option.  Here are some basic steps to negotiating with your credit card company.

1. Start collecting other credit card offers in the mail.  Keep track of what rates they are offering.
2. Calculate the difference in the interactive spreadsheet to determine whether the difference is worth your time. 
3. Call the credit card company to negotiate.  If they fail to negotiate, transfer this money to the company that made the better offer.  By the way, don’t ever use that old or new credit card again.