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Is Credit Card Debt Reduction With a 0% Loan Offer a Good Idea?

Written by Steve Rhode


Dear Steve,

I was unemployed in 2014 and accumulated $33,000 balance on my credit card. Since then I got a job and trying to pay it off. But I can only afford the minimum payment which is $800. I make $36000 a year. My credit score is 670.

Should I contact one of these loan or credit card companies who send out offers to give me loan with 0% APR for 15 month? for example Lending Tree or Americor,



Dear Nicole,

A low or no interest rate offer is a ploy to get you to switch your balance to a new lender in hopes you won’t pay it off by the end of the introductory period.

A 15 month 0% interest rate offer can be a smart way to eliminate your $33,000 in credit card debt but you’d need to pay $2,200 every month. As Lending Tree says, a balance transfer offer can charge you 5% of the balance to make the transfer. So your $33,000 balance will turn into $34,650 just for doing the transfer. – Source

Ultimately what you have here is a math problem. To determine what option is the least expensive you will need to look at the cost of the balance transfer and estimate the balance remaining at the end of the introductory period. Then look at what your interest rate will jump to.

Consider if you did the balance transfer and kept sending the $800 a month you would be able to reduce your balance by $12,000 in 15 months. The big questions is if you will continue to send that payment that is already stretching you. If you are not saving and building up your emergency fund right now then sending the entire $800 may not be a smart thing to do.

So let’s use the Get Out of Debt Calculator to compare your logical options to dealing with your debt. You can best deal with your situation by looking at the bigger picture rather than just reacting to your financial pressure.

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For example, are you saving money for retirement now? Are you building your emergency savings account? Are you just going to limp by each month making little to no progress on reducing your debt? Is your primary goal to set yourself up for future financial success or just make the minimum payment?

Take a look at this calculator to see how much you will lose in retirement by repaying your debt. You might decide the loss is okay with you but you need to understand all the facts so you can make the best decision for you.

I can always create a roadmap on how to get you to where you want to go, but where is that?


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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