10 Steps to Paying Off Balance Transfer Cards Early

It seems simple, right? To pay off balance transfer cards—or any debt— you spend less than you earn and send the leftover money to the lender. That’s true, but there’s a lot more to it. You have to get your mind right and set up systems that support your debt-payoff goals.

I’ve successfully and unsuccessfully used balance transfer cards to pay off debt quicker. I don’t recommend them unless you’re disciplined and follow these tips. I nearly maxed out the latest balance transfer card and was determined to pay it off before the 0% interest rate expired in December 2018. In this post, I’ll break down each step I took to pay off a balance transfer card 5 months early.

Balance Transfer Card Debt Breakdown
Here’s the timeline:
  • August 2017: I got approved for the Barclaycard Ring Mastercard, a 0% interest balance transfer card with a $0 balance transfer fee. Yep! I transferred my debts for free! I transferred two credit card balances and a grad school loan onto the balance transfer card (Bank of America Visa $2,194 + Old Navy Visa $1,943.87 + Grad School Loan $2,809.87 = Total $6,947.74).
  • December 2017:  I paid off the two credit card balances. Those interest rates were 19.40% and 25.24%, respectively.
  • July 2018: I paid off the balance transfer card in full.
  • December 2018: The date in which interest would have started accruing on the remaining balance if it were not paid in full.

10 Steps to Paying Off Balance Transfer Cards 2 Early 1

Click here get the 10 steps to paying off a balance transfer card early.

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Which Debt Do I Pay Off First? Here are 4 Methods (Free Worksheet)

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

If you’re new to the debt-free journey, you might be lost in the sauce. You don’t know where to start in this debt-payoff process. “Which debt do I pay off first?!,” you shout. I feel you.

When I started to become financially literate, I didn’t know anyone personally who was paying off debt. I had to educate myself.

The first things I learned were YOU MUST PAY MORE THAN THE MINIMUM and ATTACK ONE DEBT AT A TIME. Don’t spread out your extra cash across two or three bills. 

Why? Studies show that when you focus on one debt at a time, you knock out debt considerably faster than those who spread the wealth over multiple accounts. Your brain likes to focus on one thing at a time. Go with it. 

  • Put extra money (“the debt eliminator” according to Patrice C. Washington) toward one debt.
  • Make minimum payments on the rest of your accounts until you pay off the first debt. 
  • Then roll over the extra money into the next debts until you’re DEBT-FREE! YAY!

Mathematically, the rollover method makes sense too. Look at the simplified example below.
Rollover versus Even Spread Payments

Rolling over shaves off 2 months! Putting all of your extra money toward one debt leads to a closer debt-free date. That’s what you want. Attack one debt at a time.

So which debt do you pay off first?

There are a few ways to prioritize debts. One of the first personal finance books I read was The Total Money Makeover by Dave Ramsey. He introduced me to the Debt Snowball. I read more and discovered the Debt Avalanche. Then I started making my own methods up. Let’s go through these four methods to prioritize which debt to pay off first. Then download the free worksheet or Excel spreadsheet to pick your favorite repayment strategy.

Click here to see the four debt repayment strategies.

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How to Form Rich Habits in 30 Days or Less

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

“Most people don’t struggle with money. They struggle with habits.”— Anthony Coleman, Financial Lituation

Let that marinate. “Most people don’t struggle with money. They struggle with habits.” What we do day in and day out weighs heavily on our lives a year from now, five years from now and so on. If we want to be financially independent, then we have to create good, daily habits that support that goal.

Tom Corley studied the habits of the rich and poor for five years. That’s when he realized that the majority of the rich share certain habits. The poor have their own mindset and habits, too. Corley’s book, Rich Habits: The Daily Success Habits of Wealthy Individuals, outlines 21 wealthy habits anyone could follow to help them attract money.

“Our habits, good or bad, determine the financial circumstances of our lives.” — Tom Corley

Here’s the thing. We don’t have to reinvent the wheel. If you want to be rich, then do what the rich do.

6 Rich Habits You Could Form in 30 Days or Less

Here are a few Rich Habits you could form in under three weeks, Corley says.

  1. Do aerobic exercise 15-20 minutes a day for at least 18 days. This promotes brain and body health. 76% of the wealthy exercise aerobically 4 days a week, according to Corley’s research. 23% of the poor do this.
  2. Eat healthy every day for at least 18 days. This promotes brain and body health. 70% of the wealthy eat less than 300 junk food calories per day. 97% of poor people eat more than 300 junk food calories per day.
  3. Read to learn 15-20 minutes a day for at least 18 days. This a personal and professional growth activity. 88% of wealthy people read 30 minutes or more each day for education or career reasons vs. 2% of poor people.
  4. Listen to audiobooks or podcasts during your commute or some other time during the day for self- or career development. 63% of wealthy do this. 55 of the poor.
  5. Write a to-do list every day to keep you focused on accomplishing your goals—big or small. 81% of wealthy maintain a to-do list vs. 19% of the poor.
  6. Limit television time to less than 1 hour per day. Yep! A whole hour! 67% of wealthy maintain skip TV vs. 23% of the poor. Guess who watches the most reality TV! 6% of wealthy watch reality TV vs. 78% of the poor. Wow!

Forming these habits could take 18 days or fewer! Not bad, right?! Brian Tracy considers these habits to be of medium complexity (can be formed in 14-21 days). If you get these habits down, then you could build discipline and form more habits based on the ones you’ve already mastered.

Click here read more and get your free worksheets.

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How to Get Out of Debt with Sheri Riley’s P.O.W.E.R. Process

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

Getting out of debt is quite simple. There are three steps:

  1. Spend less.
  2. Earn more.
  3. Pay off debt with the difference.

Simple, but not easy. Debt slayers are acutely aware of this. If it were all about the  numbers, then everyone would be debt-free in a heartbeat. But the debt-free journey also calls on you to fix your mindset and find strength, courage and creativity you probably didn’t think you had.

Sheri Riley’s awesome book Exponential Living: Stop Spending 100% of Your Time on 10% of Who You Are lays out a solid process for setting yourself up to achieve any monumental task. She calls on you to live in your P.O.W.E.R.

  1. P – PerspectiveAdopt a point of view that empowers you.
  2. O – OwnershipOwn what is important to you.
  3. W – WisdomIdentify your one or two next basic steps.
  4. E – EngagementCommit to the implementation of those steps.
  5. R – RewardStay consistently engaged with the process in order to experience the positive outcomes.

Let me explain how to use your P.O.W.E.R. to slay debt.

P – Perspective – Adopt a point of view that empowers you.

If you want to make a change in your life or respond effectively to a challenge, the way you look at the situation—your perspective—is critical.

Sheri writes that if you see the situation as an opportunity or chance to elevate your game instead of a crushing blow or bad luck, then you’re halfway to a positive resolution. I believe her.

On a podcast, a journalist who eliminated over $100,000 of debt in two years said he stopped thinking of his debts as burdens. Instead, they became targets. Then he set his sights on getting rid of the first one on his list. And then the next one. And then the next one. I had started using that tactic, too. Each line in my debt snowball has a name, for example, Operation: I’m So Over Undergrad Loans and Operation: Old Navy is Old News (a credit card). Those names make me feel empowered. It’s like I’m a soldier on a mission, no longer the prey.

How do you view your debt and your current circumstances? It’s easy to feel down on yourself. Being $40,00, $50,000 or $100,000 in debt is no fun at all. But if your perspective is “I’ll always have debt,” well, chances are you’ll always have debt.

Forgive yourself for your past money mistakes. Shed limiting beliefs—yours and those you’ve adopted from family, friends and society. And instead of spewing negativity into the universe, speak positively about where you want to be and how you’ll get there. Say “I’m going to be debt-free. Wealth is mine!” That’s the self-fulfilling prophecy you want to manifest.

Get Out of Debt with the POWER Process

Click to read more about the P.O.W.E.R. process.

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Four Times You Should Pause the Debt Snowball

I wanna keep rollin’ on the river like Proud Mary, but I might have to let the debt snowball chill a little. And that’s perfectly fine. Really, it is.

We can get tunnel vision when focusing on a goal, but life happens and we must reconsider where we put our energy and our money. Sometimes it’s better to save it than pay off more debt.

Here are four times it’s OK to pause your debt snowball.

1. You dipped into your savings.

This is probably the most obvious reason, right? You get a flat tire (or two) and use your baby savings to cover it. To replenish the coffers, press “Pause” and put any extra money back into the fund for the next snafu. Because we know it’s not a matter of ‘if’ one will arise. It’s ‘when.’

2. You have a major life event on the horizon.

Surgeries, moves and births cost a whole lotta money. To avoid huge charges on a credit card, press pause on the debt snowball to shore up some cash. You’ll feel much better saving to spend than becoming further indebted.

Times You Should Pause Your Debt Snowball

3. You’re not sure of your next move.

Maybe just pause for one month to try to figure out the next step. You’ll want cash on hand if you have to move or pay for a certification for a better job. If you give all of your money to your Visa, guess where you’ll go when you have no savings and you need money again. That’s right! Visa. If you feel more stable after a month or two, then throw that extra savings back into the debt to start the snowball again.

4. You want to eliminate debt with the highest interest instead of the lowest balance.

Your debt snowball is supposed to roll from the smallest balance into the next. Well, what if two balances are nearly the same, but have different interest rates. That $623 student loan incurs only 1.9% interest each month. But that Chase Card’s gotchu for 24.24% interest each month. That balance is $825. The student loans accruing about $0.40 of interest each month. Chase’s accruing nearly $20, and you’re only making $30 minimum payments. That hustling backwards.

This was my predicament on May 1. I wanted to get rid of that credit card for the emotional win and peace of mind. And guess what! I paid it off on May 31—in just one month! Switching from the debt snowball to the debt avalanche paid off big time! Now, that student loan is in the crosshairs.

Have you ever paused your debt snowball? Why and how’d you decide to do it? Please leave your thoughts below.

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12 Tips for Staying in the Debt-Busting Mindset

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

Debt-fatigue is real! Paying off debt month after month gets old, but it’s necessary to attain financial freedom. Ain’t nothing wrong with reciting affirmations (I love it) and reading books (I almost love this more than chocolate). But we already know how awesome those practices are for believing in and educating ourselves. Here are 12 other tips for staying motivated along the debt-free journey.

1. Imagine your life with no debt and huge savings.

Really. Just imagine that. Think about what your life would be like without sending $400 to your alma mater each month for that 10-year-old degree. Think about the vacations you’ll take with your family and the memories you’ll make. Think about the smile on your kid’s face when you watch her soccer game instead of moonlighting at the coffee shop. Think of putting all of that credit card interest in your Roth IRA. Better yet, go to a retirement calculator and type in what you pay in interest every month as the monthly contribution to see the what your money could be doing. If none of these scenarios motivate you, then I don’t know what will. Always remember why you’re paying off debt in the first place to stay focused.

2. Repeat: “Budgets are my friend. Budgets are my friend.”

Is that an affirmation?! Ha ha! Anyhoo, some of us think budgets suck. But nah! They don’t deprive you of anything. Think more positively. Budgets (a.k.a. spending plans or financial freedom maps) help you achieve your goals quicker and easier. When you direct where your money goes, you don’t wonder where it went at the end of the month or whether you’ll reach your credit card payoff goal. You’ll know that you’ll achieve your goal in three months by paying $200 each month. You become the boss of your money.

3. Nickname accounts according to your goals.

“Savings x5678” doesn’t provide much motivation or clarity as to why you’re saving in that account. Put some respeck on that name! Change it to “Summer Disney Trip” or “Dream Home Down Payment” to keep your goals top of mind. When you remember why you’re saving, you’ll be less likely to dip into that account for jeans. Got a credit card balance you want to crush? Go to your online dashboard and change the name from “Visa x1234” to “Pay off by July.” Feel free to change your passwords to reflect your goals, too. How about $lashD3btby2020?

TIP: If you use the Bank of America app, follow these instructions. Sign in > Click on the name of the account (i.e. Bank of America Gold Visa x1234) > Click “Edit” next to the account name > Type in your awesome, new, goal-oriented nickname. > Press “Done.”

12 Tips for Staying in the Debt-Busting Mindset

Click here to get more tips.

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Save or Pay Off Debt? Or Both?! Use This Decision Map for Guidance

Dozens of best-sellers, financial gurus and conventional wisdom will tell you to save for retirement no matter what part of the financial journey you’re on. “Save yesterday!” they shout. The one person who goes against the grain is Dave Ramsey. The man even tells people to stop getting their 401(k) employee match to put every red cent into paying off debt. Extreme much?

Here’s why? The power of focus. Dave says when people get “gazelle intense” about slashing debt in Baby Step 2, they do it in 18-24 months on average. They stop 401(k) contributions, sell everything but the kids and create extra income streams during this intense season. These folks are determined to pay off lenders quickly so they can start paying themselves.

But not everybody’s drinking the Kool-Aid. They understand the power of compound interest over time. Many folks in the debt-free community are savings for retirement and eliminating debt, forgoing Dave’s advice. I’ve been tempted to follow suit.

Are you on the fence, too? Ask yourself these questions to determine whether to save, slash debt or save and slash at the same time. See what I decided at the end of this post.

Do you have at least $1,000 in savings?

Yes? Awesome! You can start aggressively paying off debt. Having $1,000 or one month’s income saved means you can put out fires like paying off an unexpected dental bill or replacing tires without getting into more debt. That’s key!

If ‘no,’ chill out on aggressive debt payments. Pay the minimum until you save up $1,000 in an account you can easily access when emergency situations arise. An interest-yielding account at a credit union or online bank that’s separate from your main checking account and debit card will come in handy for this. If you feel more comfortable putting away $2,000 or a full month’s income, then go with that. Personal finance is personal. These questions and tips are guidelines.

Save or Pay Off Debt Decision Tree

Click here to read more and find out what I decided.

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8 Things to Consider about Balance Transfer Cards (Freebie Included!)

Balance transfers are fantastic—IF you use them correctly. That’s a big ‘IF.’ These transfers move a balance from an interest-yielding card to a new card that offers an introductory interest rate as low as 0 percent for a certain time period. 

That means you’re putting money toward your balance—not the pesky interest—over that period, for example, 6 or 12 months. You can even put more than one balance on a new card. This tactic can help you get out of debt quicker and save hundreds of dollars overall.

You MUST make up your mind to kill this debt before the carriage turns into a pumpkin or you’ll be S.O.L. and stuck with paying interest again. Download your free worksheet here to get started.

The Tale of Two Cards

In early 2015, I got my first balance transfer card, the Chase Slate. Chase paid Old Navy, making it seem as if I paid the card in full. Then I started paying Chase without worrying about interest. I killed that debt well before the April 2016 deadline with a huge medical bill reimbursement.

Transferring your balance won’t do you any good if you don’t pay it back in time.

I got a little happy and took advantage of another transfer offer in 2015. Well, it took advantage of me. Ha ha! Life happened. My paid-for, 2001 Mazda croaked the day before Thanksgiving that year. I got a new car—and the $250 monthly payments to go with it. That meant my huge payments to the balance transfer card stopped cold turkey (Pun unintended). Then, I started spending money to prepare for China. 

I couldn’t pay the card off by November 2016 and have been getting hit with about $40 in interest each month ever since in addition to the $2,000-plus balance. IT SUCKS!

I’m unsure if I’ll ever get another transfer again, but if I do, I’ll heed these tips, make a concrete payback plan and stick to it come hell or high water.

What To Consider When Selecting A Balance Transfer Card

Bankrate.com is a great place to start comparing balance transfer cards. When you look around, check out these details:

Read more and get your free worksheet.

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7 Reasons to Become Debt-Free

The best debt is the debt you don’t owe anymore! — Patrice C. Washington

I’ve gotta be honest. I’ve been plugging away at debt for a few years. The cost of debt really hit me when I left graduate school in 2013 and saw the colossal debt mountain obstructing my view of financial freedom. I’ll never forget opening up that first bill in my mother’s house that summer. My eyes leaped out of their sockets and my mouth dropped, forming an oval of surprise.

Almost four years later and several monthly payments of $350, I still owe more than the original balances. These federal loans are just my highest monthly payment. Small undergraduate loans and three credit card balances stand in my way of financial bliss.

I’ve known how to get out of debt for years. It’s simple:

Live below your means. Put the difference towards your debts. Don’t acquire more debt.

It’s just like losing weight. You have to burn more calories than you consume by exercising and eating well. Easier said than done. The why‘s more important than the how. 

In order to climb Mount Debt, I must always keep my why front and center so I can push through the discomfort, the days when I want to blow my budget and the nights when I want to say “Yes!” to my friends’ invitation to hang out. The motivation must be strong.

Here are 7 reasons I want to get out of debt—and stay out of debt!

7. To bless others. Right now, my natural talents are my gifts. Need someone to spruce up your resume? I’m yo’ girl. But, sorry, I can’t donate $50 to your cause right now. I’m my own cause. Ha ha! I can’t serve others the way I want with my money being tied up in debt. I can’t help the poor if I am the poor. This debt has gotta go so I can spread more than my wealth of knowledge to my community.

Reasons To Become Debt-Free

Keep on reading!

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