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Is it good to keep switching credit cards to pay off debt?

Posted By Jim On 12/21/2007 @ 1:21 pm In Credit | 3 Comments

This question comes from a reader (I’ll spare you the contents of the message) and my quick answer is Yes, though the longer answer comes with a whole slew of caveats. The bottom line is that the key to paying off debt is to exercise financial discipline. Financial discipline means you have to spend less money so that you can put more towards paying down that debt. The more you put towards principal, the better. (duh!)

That being said, switching credits cards to chase a 0% APR balance transfer is a solid strategy as long as you follow the more important financial discipline part. By taking advantage of 0% interest, more of your payment goes towards principal so you’re paying your debt off faster. So, yes, switching credit cards (assuming you’re getting a balance transfer at a rate lower than your current rate) is a good idea.

But, let me stress that the key part of the above strategy is the financial discipline – you have to stop spending. Right now. Not tomorrow… not after the next electronic gadget or nice outfit… right now. Commit to paying off your debt.

Jumping from card to card is going to pummel your credit (more hard inquiries, increased credit lines, etc.) so the 0% APR game is going to yield you a diminishing rate of return so don’t squander it by buying stuff instead of paying off your debt.


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