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Pay down your credit card debt with this two-step process

By , CardRatings contributor

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Balance transfer process

should-you-pay-credit-card-debt-with-a-p2p-loanLooking for the quickest way to pay down your debt without paying exorbitant interest rates or hurting your credit? One of the best ways to get that debt under control and minimize what you're paying in interest while lowering those balances is to take a two-step approach that begins with transferring those balances. Take advantage of some of the best balance transfer credit card options out there, and then utilize those 0 percent APR periods that come with new credit card ownership to pay down your debt quickly without racking up tens or hundreds of dollars in interest.

Step 1: Stop paying interest on your balance

Interest fees quickly add up as your balance grows. If you aren't paying off your balance every month, and let's face it - most of us don't - those charges will add up quickly. Next thing you know your credit card balance is hovering near your total credit line, impacting your spending ability and your credit score.

Finding a balance transfer card is just what the doctor ordered if you want to start fresh and get a handle on your credit. What does that mean? It means moving your money from one credit card where you are currently paying interest, to another one offering an introductory interest-free deal on balance transfers.

Let's look at an example: Say you have a balance of $10,000 on your credit card and your current interest rate is 19 percent. If you transfer your balance to a card that offers a 12-month introductory 0 percent APR period, over the course of that year you would save nearly $2,075. That's an enormous chunk of change that can stay in your pocket (or, better yet, go toward paying down your balance) as opposed to lining the pocket of the bank.

The key is finding a card that offers a 0 percent introductory APR balance transfer fee. That period could be anywhere from a few months to more than a year. Check out our reviews below for some of our picks.

Step 2: Use the 0 percent period to attack your balance

Many credit cards offer a 0 percent APR period of anywhere from nine months to nearly two years. Once you've selected the card you want, consolidate your debt to that new card and then fight to pay down your balance before that period ends and the rate goes up. Remember that the rate after the introductory period could be even higher than what you were paying on your old card, so it's critically important that you use the 0 percent period wisely and pay off your balance or at least make a significant dent in it. Remember that $2,000 you're saving in the example above? That money should go toward your balance.

Here's a list of some credit card options to help as you start your search for the card with the best options for you, whether you need a 0 percent intro period or a low ongoing rate:

Citi Simplicity® Card - No Late Fees Ever - (Citi is a CardRatings advertiser) The Citi Simplicity® Card - No Late Fees Ever offers a 21-month (from date of first transfer) 0 percent intro APR on balance transfers, all transfers must be completed in the first four months (then, 15.99% - 25.99%* variable, based on creditworthiness). If you transfer a balance with this offer, after your 0% intro purchase APR expires, both new purchases and unpaid purchase balances will automatically accrue interest until all balances, including your transferred balances, are paid in full. With this card there is a balance transfer fee of 5 percent (or $5, whichever is greater) of each balance transfer, but you still stand to save substantial money if you're looking at needing the full 21 months to pay off your balance. The 0% intro APR also applies to new purchases for 12 months from the date of account opening; after that 15.99% - 25.99%* variable, based on creditworthiness.

Barclaycard Ring® Mastercard® - The Barclaycard Ring® Mastercard® offers a low ongoing 13.99% Variable APR, but it will also give you 15 months no interest on balance transfers made within your first 45 days as a cardholder. The low ongoing rate means you could still stand to save some money if you need longer than an introductory period to pay off your balance. Keep in mind that this card does charge a balance transfer fee for transfers made within that first 45 days, but doesn't charge a fee for transfers made after that period (of course, you also won't have 15 months no-interest on transfers made after that period). (See Rates and Fees).

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