For instance, Lisa who owed $15,000 on a 16% card with a 2% minimum payment (which is $300) – if she managed to pay only the minimal amount, it would take around 44 years to pay off her debt as the total cost would be up to $43,992

Then, she decided to transfer her balance from her old card account to the new one which offered her a lower-rate card with 12% of interest, and send in the same amount to pay off her balance. It would take around 30 years to get rid her debt for good – that saved her $14,447.

Paying a bit extra on the minimal payment able to hasten the paying off process – for example, if Lisa consistently sends in $400 a month, she’ll be able to save $25,098 and able to achieve debt-free status at the end of four years.

It might sound like a fairy-tale story when people using balance transfers to pay off credit card debt. It can turn it into a “nightmare” if someone neglect of the following:

1. Don’t close your old credit card accounts

Once you’ve transferred the balance from your old card account to the new one, keep the old card because closing your old account can affect your credit score. In fact, closing your account can actually cause more damage on your credit score than opening up a new credit card account. It is because closing your account will lower both the average age of your accounts (15% of your credit score), and your debt to credit ratio (30% of your credit score).

Besides that, it is preferred that you don’t charge any money on anything until you get your total balance down fewer than 30% of your available credit. If it’s possible, don’t spend on your balance transfer card in order to stay focus on getting rid of your debt.

2. The standard (Annual Purchase Rate) APR rate are given based on your credit history

Don’t think that all banks are providing the same regular APR for all credit card holders. In fact, actual APR imposed is based on applicant’s credit history. Apparently, a person has to pay more in interest than anyone else because of his low credit score. Thus, you have to make comparison of all the credit cards available so that you can find a card which has the lowest standard APR.

3. Never spend on a balance transfer card

Remember that your main aim of having balance transfers is to pay off your credit card debt – therefore spending your balance transfer card actually beat the purpose. Since your old and unused card has no balance, you can still use it – but this time, spend it wisely like you’re using real cold cash. In short, one card is meant for spending as the other one is meant for paying off debt. Make use of the time (6-12 months) and zero interest to pay them off and save most of your hard-earned money.

4. Always read the fine print (by using a magnifying glass – if required)

This is the part that you cannot ignore – you have to be alert of any fees involved including balance transfer fee (which banks normally charge 3-10% of the total amount transferred). There are other things that you must aware:

• The standard APR after the introductory period – what the rate will be after the introductory period.
• The duration of the introductory rate – how long you can actually make use of the introductory rate (it can be zero percent).
• Don’t use a card if it has higher rate for new purchases.
• No matter which card you’re using – It always have high default APR – so, don’t make any late payments.

• Take a look at the first few pages before you shred them into tiny strips of paper
• Put it under your coffee cup as your coffee coasters
• Sort them up according to their dates and the name of the card issuers

If you choose to do one of it – your life is at ‘stake’ because of your total ignorance of the risks of getting yourself into unnecessary credit card debt. By right, you shouldn’t blindly shred these statements if you haven’t checked on them.

Here are the main reasons why you should check your own card statements:

1. To verify the exact amount of total credit used

You can track your account activities and its respective transaction amount that is debited into your credit card account. If you prefer checking your statements online, it’s better to print out your statements and file it up into your folders than saving it up in your computer especially if your own more than one card.

You need to have a habit of re-checking the total credit used although it has been stated on the card statement. Visualize yourself as an “accountant” – who is highly sensitive to numbers, you have to recalculate the total credit used as well as checking each of your account activity on your own in order to make sure that you’re not overcharged by your credit card issuer.

Remember that a slight difference of your total credit used can possibly affect you in either two ways:

• If you don’t realize that you’ve been overcharged by your card issuer, you’re actually paying more than usual and that’s not worth it. Probably you would likely to experience credit card debt that you weren’t supposed to have.
• If you’re able to identify a certain amount of credit used that you didn’t use – respond in writing by writing a letter to your card issuer to notify them about the inaccurate information stated in your statement.

2. Be alert of interest rate changes

In such competitive market, banks set up their own interest rate based on a benchmark (a.k.a. primal rate) and it’s common to have interest rate changes as the response of Federal Reserve (a.k.a. US Feds) during economic recession.

However, most credit card users have not been well-informed about the changes of the interest rate because some card issuers change the terms and conditions without any prior notice. That’s the reason why you should not throw away your statement without reading it. If your current interest rate has been raised, you can start opting out to reject the new and higher interest rate. This can only be done if your card issuers have “opt out” in their policy.

Furthermore, you are likely to have your credit card account closed even if they allow you to repay the balance under the old interest rate. One thing that concerns most people is that closing your account might hurt your credit score. If you usually pay your card bills promptly, don’t opt off out of interest increase.

3. To make sure that you always get the right deal

If your past purchases are subject to the new and higher rate, there’s no point that you should continue using this card as your outstanding balance is also subject to the new rate. At this point, you can complain to the issuers about this unfair consumer practice. If you don’t get the right deal as offered, stop using the card and pay off the balance fast, or make a credit card balance transfer.

Most of these problems can be fully overcome if you’re starting to nip the problems in the bud. However, things would become worse if all important stuff is messed up that caused major distraction to your problem-solving.

Therefore, overcoming your credit card debt is like battling with a disease – it can be either mild or life-threatening disease; depends on how you deal with it.

If you decide to swallow the bitter pill to get rid of this ‘sickness’ – any little steps count in order to get things done the right way. Here are the preliminary steps on how to get organized to deal with your current credit card debt problems:

1. Sort out your credit card bills or bank statements

This could be the simplest or the hardest task to achieve when it comes to filing all your credit card bills or statements orderly. Initially, you can use paper folders to store these bills chronologically according to its dates and the name of the credit card issuer. Then, label these paper folders accordingly. You’ll refer to these bills to find out whether the outstanding amounts are accurately calculated by your creditors.

2. Clean up your credit card bills if you’re overcharged

In some cases, you might be overcharged due to the changes of the terms of conditions of your credit card agreement or common miscalculation done by your creditors. The worst case is identity theft – which your credit card had been used illegally by fraudsters that can rack up more than thousand dollars of credit card debt. By regularly tracking your card bills, you can notify the credit card company when you’ve found any dubious purchases that can be linked to identity theft.

3. Create Excel spreadsheets to track your daily spending

In order to have your credit card spending in control, you can track your daily spending with your card by using Microsoft Excel. This tracking method can be done by inputting amount of every purchase with your card on either daily or weekly basis. It also involves some basic calculations to verify the exact outstanding amount that you really owe to your creditors.

4. Don’t procrastinate – Pay up your bills promptly

Being absent-minded can put anyone into high risk of racking up credit card debts especially for those who are tirelessly busy with their work and have forgotten to pay their card bill on time. There are many free online organizers (such as Google calendar) that help you remember important dates – particularly due dates of your credit card payment.

If you prefer to have your credit card payment automated, you can opt for scheduled payment that is available in most online banking services in which your money is credited to your credit card account.