Saying Goodbye to Your First Credit Card (the balance, anyways)

This guest post was written by Jason Bushey. Jason runs the day to day operations at

Just recently, I finally broke ties with an old friend.

This friend and I had been through a lot together, and at times they’ve bailed me out of some sticky situations. But unfortunately, when it came to this friend, the bad outweighed the good; they always seemed to take me for granted, they never offered much in the way of rewards for my loyalty, and they were always hitting me up for cash and claiming I owed them more than I really thought I did.

Yes, this old friend is/was my first credit card.

By and large, your first credit card is pretty bad. Since you’re without a strong (or any) credit history, you’re likely to pay your highest APR on your first credit card. Your first credit card often has a low credit line and next to no rewards. But hey, you take what you can get.

credit card

However, once you hit your 20’s and gain a little more respect (and history) in the eyes of creditors, odds are you might see some sweeter credit card deals start to trickle into the mail. If you’re like me, you’ll ignore these for months – even years – before finally realizing that the credit card balance you’re trying to pay off each month really isn’t getting any smaller.

Hopefully, you’ll realize this long before I did. When I came to the (sad) realization that I had gotten next to nowhere in paying back my admittedly small debt, I finally had the wherewithal to check out my existing APR and figure out what the heck was going on.

As it turned out, my APR was sky-high. Why? Because I wasn’t getting rewarded for any of my responsible spending; good credit score, no late payments and a low credit utilization don’t mean a thing if your credit card is no good.

So I started to shop around online for a new, better card with one especially important factor in mind: the card had to have a 0% intro APR on balance transfers.

If you’re not sure what a balance transfer credit card is, the idea is pretty straight forward: you essentially just take the credit debt you’ve accumulated on one credit card and move it to a new card that doesn’t charge interest during their introductory period.

And this isn’t a secret or anything like that; credit cards like the Citi Simplicity® Card and others openly promote 0% balance transfers as a means to acquire new customers.

As soon as I transferred my balance, I started to (finally) make a real dent in paying back my credit debt. Yeah, I had to break up with my old credit card, but in the end it was well worth it and the entire process was simple. My only regret is that I didn’t do it sooner.

Here’s how to transfer your credit card balance, as well as some things to consider before (and after) you do:

Find a credit card that’s right for you

This actually goes beyond 0% APR on balance transfers, since many great credit cards offer this option. Remember that too many credit cards can hurt your credit score, so you want to make each credit card in your wallet count.

If you want airline miles, get a travel rewards card. If you’re most interested in points or cash back, then consider a Discover or American Express card that includes 0% APR on balance transfers during the intro period. And speaking of intro periods…

Come up with a payback plan

Before clicking the apply button on your desired balance transfer credit card, make sure you have a payback plan in place. Figure out how many months it will take to pay back your debt, then match this timeline with a similar introductory period.

If you come to the conclusion that it’s going to take you 11 months to pay back your credit debt interest-free, then consider a credit card like the Slate from Chase – No Balance Transfer Fee card. Not only will you have 15 months to pay back your debt, but you won’t be charged a fee on your balance transfer…

…Yeah, there’s usually a fee to transfer your balance

Balance transfer fees are usually 3%- 5% of the amount your transferring, or $5 – whichever is greater. This is a small price to pay for all the money you’ll save on interest, however.

Once you receive your new credit card, transfer your balance as soon as you can

In order to make the most of your 0% intro period, you’ll want to transfer that credit card balance immediately. Generally, balance transfers take 7-14 days to go through since credit card companies literally snail mail a check to one another. Finally…

Do NOT close your old credit card account

Finally, while you may want to wipe your hands clean of that old credit card with the massive interest, it’s actually a bad idea to close a credit card account since it can have a negative effect on your credit score. Hide it, cut it up, do whatever you need to do to keep it out of your midst if you must. Just don’t close it.

So, with 2013 on the horizon, make the new year the one in which you stop paying interest on credit cards. Your wallet will thank you. Your old credit card company? Not so much.

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