How to get rid of a $10,000 credit card debt
The banks are changing their credit card balance transfer deals all the time but there are only a few cards that will help if you have a debt of $6,000 or over.
YMM has said it before and we will say it again, a deal to transfer your credit card balance for 0% sounds great but look at how many months you have at that rate and then look at what the rate will be after that time before you take the bait.
A comparison of the seven latest credit card balance deals reveals that only three or four cards will enable you to pay back your entire debt before the special rate ends and only if you can afford to repay $1,000 off per month.
The best of this latest batch of credit balance deals is the Bankwest Breeze. It’s balance transfer rate is not a sexy 0%, it’s 4.99% but the discounted rate is available for 12 months and then the rate will stay at a very low 10.99%.
That’s a much better deal over the longer-term than a 0% for three or six months offer that leaves you with a rate (after the honeymoon) as high as 19.24%
(ANZ Platinum Visa). The ANZ does offer a $0 annual fee for the first 12 months but if you keep the card and keep using it beyond the honeymoon, the fee jumps to $87 per year.
Other new card transfer deals that get the YMM thumbs up are the Virgin Money Virgin Flyer Visa which also offers 1.9% for 12 months so it’s useful for balances of $1,500 if you can afford to repay at least $200 per month. It will help you to get rid of a $3,000 balance, provided you can afford to repay $500 per month.
You’ll need to be able to repay $1,000 before the Virgin card will be a good bet for a balance of $6,000 or higher. And be warned, if you don’t manage to reduce your balance to zero before the end of the 12 month honeymoon, the rate you’ll pay on any balance still hanging around and on new purchases will jump to 20.99%. That’s steep.
Tip: FOR THE LATEST IN-DEPTH ANALYSIS OF BALANCE TRANSFER DEALS, HOW THEY WORK, TIPS AND TRAPS, BUY THE LATEST ISSUE OF YOUR MONEY MAGAZINE, AUTUMN 2012, AVAILABLE AT YOUR NEWS AGENT NOW.
Latest card transfer dealsSource: www.yourmortgage.com.au