So you got yourself in trouble, eh? You spent more than you could pay off in a month, just like I told you not to. Now you’re stuck paying interest like a sucker.

Interest charges are perhaps the sneakiest of all ways to grow your debt. If you’re using credit cards for most of your purchases, and it’s starting to get away from you, you can sometimes miss the fact that you’re being charged extra money once a month for interest. But it adds up to a ton of cash over time. For $1,000 balance at a 23.49% APR, you’re talking $264 in interest over a year. That’s way too much. You’re smarter than that.

Balance transfers can be your way out, if you’re smart and careful. See, many credit cards will offer a balance transfer at a 0% APR for a promotional period of time, usually 12-24 months. This tends to cost a small percentage of the total transfer amount, somewhere between 2-4% upfront. So in general, you can make out ahead if you’re smart. Here’s the rules.

Stop the bleed

The first step is to figure out how to come up with a month to month surplus in order to pay down the debt you have. The additional interest that you’ll be removing will only be a partial recovery, you need to cut back on your spending. Remember, it’s just a promotional period. So how much do you need to cut down?

So, lets say you want to do a $5,000 transfer, at a 3% transfer fee, with a 24 month 0% APR promotional period. You’re moving off of a 15.49% APR card. So lets do some math:

$5,000 + 3% = $5,150
$5,150/24 = $214.58
15.49% APR on $5,000 = $64.95 monthly

Minimum Cuts needed: $149.63 per month

You’re going to need to find the ability to pay $214.58 per month in order to make this work. If that’s absolutely impossible, but you have good credit, you can potentially chain these deals, but that costs more money each time and isn’t guaranteed to be available.

Find The Card

You’ll need to find the right card to do this with. The first place I check is all my current open accounts. I generally have a few with 0 balance on them, and you can go on your account right now and find out if they’re making any balance transfer offers. It’s always nice to not have to open a new line of credit if you don’t have to. Be Aware that you, in general, cannot transfer a balance between two cards with the same company. That is, you can’t transfer a Chase Freedom balance to a Chase Slate card, for instance.

If that doesn’t work, check your mail. I get 2-5 mailers a week offering different credit cards with different rewards. Try to pick the one that’s right for you, and make sure you dig into the details. I generally won’t accept anything over a 3% balance transfer fee. I also try to look for the cards with the lowest rate after the promotion is over, just in case something happens and I’m unable to pay this card off. You never know if you’ll become suddenly unemployed, and having a huge APR at that time is one more thing you’d rather not deal with.

Plan Out The Timing

A Balance transfer can take weeks to process on both sides. During this time, you still have to pay your old card as if the balance is still there.  If you can, start the process of a balance transfer just after you’ve made a payment to your card. This takes out the guesswork of how much transfer needs to happen.

Also be aware that there will probably be one more extra payment next month, in order to pay for the interest accrued over the time you were waiting for processing. Yes, you legally have to pay for it, there isn’t much use fighting the charge.

I hope this helps as many people as possible get a little bit more out of their money. Let me know if there’s any more good tips you’ve found below, and please share this post with anyone that might need this kind of help!