The first time I heard that I could pay off my debt using balance transfer cards and not pay a penny in interest, I felt like I’d hit the jackpot. Unfortunately, balance transfer offers don’t always pan out the way they should.
I had racked up $6,000 in credit card debt after getting a raise at work and overestimating my newfound spending power. I realized I needed to stop spending and pay off that debt quickly, but the massive (25%) APR on my credit card was making it hard to progress.
This was when I discovered that some credit cards that offer a 0% APR on balance transfers for a promotional period of time, ranging anywhere from a few months to nearly two years. Perfect, I thought.
I did some research and settled on the Chase Slate, one of the most popular balance transfer cards. At 15 months, it doesn’t have the longest promotional period, but it’s still a generous amount of time. The best feature of the Chase Slate, though, is that it doesn’t charge a balance transfer fee if you make the transfer within the first few months, whereas almost all other cards charge 3%.
I was approved for the Chase Slate with a credit limit of $7,500. I immediately transferred over the $6,000 and breathed a sigh of relief. I could now make monthly payments and double down on my debt without accumulating any more interest…or so I thought.
In order to pay off my debt before the end of my promotional period, I would have to make monthly payments of $400. But, feeling relieved by my new interest free card, I decreased my monthly payments instead and only paid around $100 per month. Some months I only made the minimum payment. I liked having the extra spending money, and I decided to worry about paying it all off closer to the end of the promotional period.
Well, 15 months came fast, and as the end of my promotional period came, I had almost no money saved up to pay off my remaining debt. I scrounged up all the extra money I could for that month’s payment, which was about $800, knocking my balance down to $4,000.
It was time to come up with a plan B, and fast. I had 30 days left until the Slate’s high APR kicked in. I shopped around for a second balance card and found the Citi Simplicity. Now, this card does charge a 3% balance transfer fee, but the 0% APR period is a lengthy 21 months. Surely I could pay off my debt with that much time.
I applied for the Citi Simplicity card and was approved – things were looking up. Unfortunately, when I received my official approval letter from Citi Bank, I found out that I’d only been approved for a $2,700 credit limit, which wouldn’t cover the $4,000 balance on my Chase Slate. I had worried about not being approved for a second balance transfer card, given that my debt to credit ratio was still so high and I’d been making minimum monthly payments, but I hadn’t even considered that I might be approved but not receive a high enough credit limit.