Balance transfer may help you to get out of debt

Written by: Financial Haze

If you are living from paycheck to paycheck and often have to take payday loans, you know how bad the interest is. Some payday loans charges over 400 percent interest per year. There are many ways to get out of debt. One proven way is to transfer your debt to a credit card that offers zero percent interest rate for a period of time. Yes, there is a catch. Most of these cards charge hefty transaction fee. Often that will be onetime fee that may be high as three percent of the transfer amount. Still it may be a better deal to get out of your debt instead of paying over 18 percent annual interest rates that many cards charges.

A substantial amount of your monthly payment goes to pay the interest charged on your balance. But if you use zero percent interest for a limited time, your entire payment goes towards paying down your debt. In order to receive the maximum benefit of this strategy, you need to refrain from using your credit cards. One other helpful way to make this strategy works is to make a list of all debt and interest charges, and to pay-off highest interest rate debt first with a zero interest card.