Many credit card companies offer an introductory 0% APR for the first 12 to 24 months of opening a card. This offer allows people to accumulate debt without worrying about interest, but their balances will snowball if they only make the minimum monthly payments.
Several credit card enthusiasts recently shared their best ideas for paying off 0% APR credit card debt before the deadline. The conversation started when someone posted on Reddit about their $7,000 credit card balance that has a 0% APR until Oct. 27.
These are some of the best tactics that came up from people who have taken out these credit cards and paid them off with time to spare.
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Pay It Off Well Before The Deadline
Most Redditors suggested paying off your credit card well before the 0% APR promo ends. Instead of viewing Oct. 27 as the deadline, the original poster can benefit from treating Sept. 27 as the deadline. This one-month window gives the Redditor a sufficient cushion if they fall just short of paying off the entire balance.
Multiple commenters suggested setting a tighter, self-imposed deadline, and it can also lead to better financial decisions. For instance, the original poster may cut their costs so they can make more progress with paying off their balance. Cardholders with 0% APR may also benefit from picking up temporary side hustles until they have paid off their balances in full.
Getting a head start now will leave you better prepared as the deadline gets closer. If you start addressing a high 0% APR balance a few weeks before the deadline, you likely won’t pay it off in time.
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Set Up Calendar Notifications
The human mind processes thousands of thoughts every day, and it’s easy for deadlines and important dates to get lost in the shuffle. Multiple Redditors recommended setting up calendar notifications that are related to your credit card’s 0% APR promo.
For instance, if you open a credit card with a 12-month 0% APR promo, you can set notifications every month and make the notifications more frequent as the deadline gets closer. It’s easy to set up notifications so they go off on multiple devices. You’ll be reminded of the 0% APR going away on your smartphone, desktop, and tablet.
“Google Calendar is your friend. Set up a notification (email AND notification) to trigger some reasonable time before [the] end of [the] promo,” one Redditor suggested.
While you can opt for a balance transfer, this approach can hurt you in the long run since you’re kicking debt further down the road instead of getting rid of it. There are also balance transfer fees that are typically equal to a small percentage of the outstanding debt. You also have the option of using a different credit card for purchases as the deadline gets closer. That way, your balance isn’t growing on the card with an expiring 0% APR promo.
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Don’t Spend More Than You Can Afford
One of the most basic principles of good credit card usage is to avoid spending more than you can afford. Someone who takes home $5,000 per month should not spend more than $5,000 per month. Many credit card companies use rewards and perks to tempt people to spend money that they shouldn’t, but interest rates and fees will exceed the amount of rewards and perks that credit card issuers provide.
If you have enough time before the 0% APR promo expires, you can opt to leave your money in a high-yield savings account instead of paying off your credit card debt immediately. This strategy, combined with living below your means, can make it easier to pay off debt. You will earn interest from your savings account, giving you extra money that you can use to pay off credit card debt.
“I did exactly this with my 36-month, 0%, car loan,” a Redditor said. “I divided the amount I owe by 35 months, and have the bank pay that amount every month. Meanwhile, the total cash for the cost of the car is sitting in a [high-yield savings account] earning 3.9%.”
Credit cards can be great financial resources for building wealth. You get to improve your credit score while unlocking various rewards and perks. If you can pay off your balance at the end of each month and ensure you don’t have a balance once the 0% APR promo period concludes, you will put yourself in a better financial position.
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