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Balance Transfer Cards 馃挸 : EVERYTHING you need to know - YouTube
Channel: Traveling Well For Less
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- Are you drowning in
debt and need a way out?
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Did you spend more than you
planned on holiday gifts?
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Have you been using your credit cards
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to pay for regular expenses?
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Or you're planning on some big purchases?
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Do you need a little breathing
room from credit card debt?
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Are you're looking for a
0% intro APR credit card?
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Thinking of doing a balance transfer
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or getting a balance transfer credit card?
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In this video, you'll learn
everything you need to know
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about balance transfers, how they work,
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whether you should do a balance transfer,
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and how you can improve your credit score
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with balance transfer cards.
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Plus you'll learn which credit cards
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you don't have to pay interest
on for almost two years.
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Some cards even offer 0% APR on purchases!
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Hey everyone, it's Debra
from Traveling Well For Less,
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where you learn how to
travel more, spend less.
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Welcome back to the
channel and another video.
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If you're new here and even if you're not,
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make sure you click that
red subscribe button below.
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While you're down there, go
ahead and hit that like button.
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A balance transfer is where you transfer
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or move your credit card balance
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from one card to another.
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Pro-tip: The best time to
do this is when you can get
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a 0% intro APR balance transfer card.
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With a 0% intro APR balance transfer card,
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you don't pay interest on
your transferred balance
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for a set period of time.
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Each card specifies
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how long you can avoid interest payments.
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The usual terms are 12 months, 15 months,
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18 months, and 21 months.
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If a card offers 0% APR on
balance transfers for 15 months,
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you aren't charged and don't
pay any interest for 15 months
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on your transferred balance.
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Think of it as an interest-free loan.
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(kids cheering)
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Pro-tip: A 0% balance transfer card
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doesn't mean you can stop making payments.
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You still have to make
payments on your debt
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but you aren't charged
interest on that debt.
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The best way to use balance transfer cards
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is to pay down your debt.
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Are you carrying credit card debt?
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Let me know in the comments.
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You can use balance transfer cards
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to consolidate and get out of debt quicker
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because all your payments
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will go toward paying off your debt.
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So if you have a $10,000
balance on your credit card
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with a high interest rate, say 27.29%,
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your minimum monthly
payment is at least $228.
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And that only covers the interest.
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Yep, not a single penny of your payment
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goes towards the $10,000 you owe!
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This means it will take you 22 years
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to pay off that $10,000 balance,
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and you'll have paid
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$50,523 in interest!
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So that 10,000 debt on that
high interest credit card
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becomes $60,523.48.
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What?
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That is insane!
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Instead, you want to get
a balance transfer card.
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You can transfer your debt
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to a 0% intro APR balance transfer card
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like the U.S. Bank Platinum Visa Card
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which offers 0% intro
APR for balance transfers
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for 20 months.
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That's almost two years
of interest free payments,
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by the end of the 20 months,
you'll only owe $5,440
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on that original $10,000 debt.
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And if you can pay a
little extra each month,
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you'll pay off your debt faster.
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Can you see how much money you're saving
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by not having to pay
interest on your debt?
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Tell me in the comments
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if a balance transfer
card would work for you.
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You can improve your credit score
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with balance transfer cards,
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by paying off your high
interest, high balance cards.
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Your credit utilization
ratio will get lowered.
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But don't close that card
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because it will lower your credit score.
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Keep it open but don't
charge anything on it.
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Pro-tip: When your 0% offer ends,
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you can transfer the remaining balance
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to another 0% intro APR
balance transfer card.
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Rinse and repeat until
you pay off your debt.
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This also helps increase your credit score
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because you'll have more
available credit and less debt,
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all factors which influence
your credit score.
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You can transfer your $5,440 debt
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to the Citi Double Cash Card
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and get 0% intro APR for 18 months.
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By continuing to make
the $228 monthly payment,
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by the end of the 18 months,
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your debt balance drops to $1,336.
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You can then roll that
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into another 0% intro
APR balance transfer card
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like the U.S. Bank Altitude Go card
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that offers 0% interest for 12 months,
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continue making that 228 monthly payment
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and your debt will be
paid off in 5 months.
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By using balance transfer cards,
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you can pay off your original $10,000 debt
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on your high interest credit
card in only 3 陆 years,
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instead of the 22 years
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and almost $61,000 it will cost you
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if you don't transfer your balances.
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(people booing)
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Although some 0% intro
balance transfer cards
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like the U.S. Bank Altitude Go card
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offers 0% interest on
purchases for 12 months,
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balance transfers works best
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if you aren't adding extra
debt unto your existing debt.
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When using a balance transfer offer,
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you should pay your bill on time.
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Pro-tip: With some 0% offers,
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if your payment is late
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or you don't make your
minimum monthly payment,
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your 0% rate gets canceled.
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Have you ever done a balance transfer?
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If so, tell me in the comments below.
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Balance transfers are best
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if you are carrying a large balance
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on high interest credit cards.
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If you're going to get a balance transfer,
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only do so if you owe $5,000 or more.
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Because you have to pay a
balance transfer fee of 3 to 5%
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so it's not worth it
if you have small debt.
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Pro-tip: Some cards don't
charge a balance transfer fee
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but you don't get 0% intro APR,
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so you'll end up paying more in interest
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than the small balance transfer fee.
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The U.S. Bank Platinum
Visa has 0% intro APR
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on balance transfers for 20 months.
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Pro-tip: The 0% intro APR for 20
months also applies to purchases.
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You can get up to $600
in cellphone coverage
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for damage or theft
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if you pay your phone bill with this card
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and there's no annual fee on
the U.S. Bank Platinum Visa.
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The balance transfer fee is $5
or 3%, whichever is greater.
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So on a $10,000 transferred balance,
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you'll pay $300 in fees.
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The Citi Double Cash
Card offers 0% intro APR
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on balance transfers for 18 months.
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You also earn 1% cash
back on all purchases
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plus an extra 1% cash back
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when you pay your minimum payment.
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So essentially, it's like
getting 2% cash back.
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This card also have no annual fee
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but charges a balance
transfer fee of $5 or 3%,
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whichever is greater.
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The U.S. Bank Altitude Go
card offers 0% intro APR
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for 12 months on balance
transfers and purchases.
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You can also earn 25,000
points when you spend $1,000
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in the first 3 months of having this card.
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Those points are worth $250 in cash back!
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(kids cheering)
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This card has additional bonus
point earning categories.
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You get 4 points for every
dollar spent at restaurants,
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2 points for each dollar
spent at grocery stores,
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gas stations and streaming services,
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and 1 point on everything else.
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The balance transfer fee is $5
or 3%, whichever is greater.
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So from our earlier
example of a $10,000 debt,
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even after adding in $526.62
in balance transfer fees,
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you'll have zero debt
after 3 years and 8 months.
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So much better than 22 years, right?
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Plus you'll only have
paid a little over $10,000
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for that debt instead of over $61,000!
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If you have small debt, less than $5,000,
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it could be worth getting
a larger balance transfer
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via balance transfer checks
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and stashing that extra
amount in your bank,
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as long as you are disciplined
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and can and will save that
money instead of spending it.
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If your credit score is low,
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and/or you have high debt to income,
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you may have a harder
time getting approved
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for a balance transfer card.
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If you have loans or large
balances on your credit cards,
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consider applying for
a balance transfer card
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from a different bank.
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So if you have a lot of
debt on a card from Chase,
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consider getting a balance transfer card
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from U.S. Bank or Citibank,
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it could be easier because
there's less risk for the bank.
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Pro-tip: Sooner is better.
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If you're starting to feel
the pinch of credit card debt,
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consider getting a balance transfer card
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sooner versus later.
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The sooner you can get
out from under your debt
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before it snowballs, the better.
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If you can't get a balance transfer card,
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another option to reduce your debt
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is to get a personal loan.
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Be sure to watch this
video about personal loans.
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Have all your questions
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about balance transfer
cards been answered?
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If not, drop them in the comments.
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If you enjoyed this video
about balance transfers
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and balance transfer cards,
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hit that like button.
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Feel free to share this
video with family, friends,
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and on social media.
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Remember to subscribe to the channel
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for more personal finance
and travel videos.
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Thanks for watching and
I'll see you next time.
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