Restructuring Your Credit Card Debt For The New Year

By Kevin / January 8, 2017
Restructuring Your Credit Card Debt in the New Year

Did you run up some debts over the holidays? Wondering how to restructure your credit card debt in the new year?

Well, you are not alone. And we are here to help.

It is extremely common to overspend on holiday shopping. Many people get caught up in the season and spirit of giving.

But now those credit card bill are coming due. And the interest charges are always more than you expected. But there are steps you can take to make paying down your credit card debt easier and more affordable.

If you’re paying high interest payments on your credit card, paying several different cards off or just want to cut down on expenses, restructuring your credit card debt can be a great option for the new year. Doing so will give you lower payments and less hassle in your financial life.

A great way to restructure your credit card debt is to transfer your balance(s) to a balance transfer card. This is just a credit card that is designed for those who wish to complete a balance transfer and, therefore, consolidate their debts and cut down on interest payments.

Which balance transfer card is for you? Let’s explore some of the cards on the market to help you decide.

Balance Transfer Cards

There are several cards on the market offering introductory 0% APR balance transfer offers. Most of them charge a 3% transfer fee. But watch out – we’ve seen several cards with transfer fees as high as 5%. That is just ridiculous.

My preference is to go with a transfer card offering the longest term on its intro transfer offer combined with the lowest fee.

Also, make sure you know how long you have to effect the transfer before the introductory offer expires. Most cards require that you make the transfer within 30 or 60 days of taking out the new credit card to qualify for the introductory rate.

Below is a comparison of some of the most popular balance transfer cards on the market. Take a look and see which cards appeal to you.

Card Name

Transfer Fee

Intro APR

Intro Length

Annual Fees

Citi® Diamond Preferred® Card

3%

0%****

21 months

$0

Citi Simplicity® Card

3%

0%****

21 months

$0

Chase Slate® Card

0%

0%***

15 months

$0

Discover it®

3%

0%

18 months

$0

Barclaycard CashForward™ World MasterCard®

3%

0%**

15 months

$0

Capital One Quicksilver Card

3%

0%***

9 months

$0

Blue Cash Everyday® Card from American Express

3%

0%*

12 months

$0

Wells Fargo Propel American Express® Card

3%

0%

15 months

$0

* Balance transfer must be completed within 30 days of account opening to qualify.

** Balance transfer must be completed within 45 days of account opening to qualify.

*** Balance transfer must be completed within 60 days of account opening to qualify.​

**** Balance transfer must be completed within 4 months of account opening to qualify.​

Which Card Should I Go With?

This is basically a toss up. Each of these cards is closely matched in terms of quality.I recommend looking for the balance transfer card with the longest introductory APR offer and the lowest transfer fee.

If the card also offers rewards points, great. But that is not a deal maker or breaker for anyone who may be looking at paying credit card interest. After all, those interest payments will easily swamp the benefits of those rewards.

Notice that all of the cards (except the Chase Slate card) have a 3 percent balance transfer fee no matter when you complete your transfer. Most have a minimum of $5 or $10 that must be transferred, but that shouldn’t be a big deal.

The more time you have to pay without interest, the less interest you’ll pay. So, find the card that works best for you, sign up and start paying less interest on your credit card debt!

None of the cards have an annual fee. Each of these cards has a 0 percent introductory rate, as well. However, where they separate in quality is in the length of the introductory period and rewards programs.

Since you are probably focused on restructuring your debt, the most important thing is saving on interest, not earn 1% back on your purchases. So the longer the introductory APR period for your transfer, the better.

Right now, I recommend going with the Discover it card. It offers a cash back rewards program. And right now also offers to double your first year cash back rewards. Combine that with the 18-month introductory APR period, and it offers the best combination of rewards and savings.

Alternatively, if you are transferring a large balance, you may want to focus on the Chase Slate card. It has no transfer fee, and offers the Chase Blueprint tools to help you manage paying your debt down to zero.

Lastly, the benefits of the Citi Simplicity and Diamond Preferred cards are that you not only get 21 months with a 0% APR on your transfers - you will get 4 months to complete your balance transfers.​

Editor's Note: Please remember to check the fine print. For most cards, the introductory financing period starts on the date your first transfer is completed. But you will want to confirm this when transferring multiple balances over several months.

Another Alternative

​If you do not think you will qualify for a balance transfer card, or are looking for even more credit to restructure a large debt load, you may want to consider a personal loan.

With a personal loan, you can refinance your debts into a single loan that includes monthly payments of principal and interest. That means you pay your balance down slowly over time, until it is zeroed out.

And you avoid the minimum payment trap, where you seem to never reduce your outstanding principal.

To learn more about personal loans, start here.

And good look in restructuring your debt in the new year!​

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