Dear Dave,
I’m trying to pay off my credit card and get out of debt. Do you think I should transfer the balance to one with a lower interest rate while I do this?
Kelsey
Dear Kelsey,
I’m not against this idea, as long as you understand that you’re not really accomplishing much. All you’re doing is moving money around, and maybe saving a tiny bit on interest. If you were planning on keeping the debt around for 30 years it would become a big deal. But if you’re talking about a few months, just until you get it paid off, it’s not that much money.
The problem with balance transfers is that you feel like you took a big step forward when you really didn’t. Lots of times this causes people to lose focus on other things they can do to get out of debt, like picking up an extra job or selling a bunch a crap they don’t want or need. That kind of stuff, along with living on rice and beans and a strict written budget, is 98 percent of the battle when it comes to getting out of debt!
—Dave
* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.