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How to Budget Away Your Credit Card Debt in 2018

Did you go a little overboard when swiping you credit card in 2017? Maybe you had some unexpected expenses come up, or maybe you just spent a little too much time on Amazon this year. Either way, credit card debt sucks. Americans have over one trillion dollars in credit card debt, the highest it has ever been in history. Couple that with the fact that nearly 7 in 10 Americans have less than $1,000 in savings, and we have a major problem. What's the solution? While faking your own death and moving to Costa Rica might sound really appealing, let's focus on a real solution.

If you currently have over $3,000 in credit card debt, you're paying somewhere around $45 a month in interest. Now think about your monthly payment. If your minimum payment is $60, only $15 a month is going towards paying off your $3,000 balance. You'll end up paying over $2,400 in interest over 7 years before you pay that bad boy off.

So what's the game plan to trim that debt down? Transfer your balance to a 0% credit card to maximize the effectiveness of your payment. Here are our top 3 recommendations, depending on your financial goals.

No Fee Balance Transfer: BankAmericard Credit Card

Bankamericard Card Art

The BankAmericard Credit Card won't charge you a fee for balances you transfer within the first 60 days of account opening. That saves you a 3-5% fee ($90-$150) right off the bat. The card will offer 0% intro APR on purchases and balance transfers for 15 months. We like this card for the waived balance transfer fee. If your budget can handle it, up your payment to $200 a month to pay the balance off while you don't have an interest charge. Even if you continue to make the minimum payment of $60, your balance will be $2,100 at the end of 15 months, instead of the $2,759 you'd be at with your existing card. That's a savings of over $600 that is being applied to your balance.

Balance Transfer Plus Ongoing Spending: Chase Freedom Unlimited

Chase Freedom Unlimited Card Image

The Chase Freedom Unlimited is going to get you 0% intro APR for 15 months on purchases and balance transfers.The card comes with a $150 cash bonus if you make $500 in new purchases within the first 3 months of account opening. There is a catch on this one though, the balance transfer is going to trigger a 5% fee. This means you're looking at a $150 fee if you transfer $3,000. This makes the product a bit of a wash as long as you use the statement credit towards your balance. The reason this card makes the list is that you'll earn 1.5% cash back on all of your new purchases, making this card worthwhile to keep around after you 0% intro period has ended. If you go this route, make it a habit to pay off all of your new purchases each month. If you're going to get out of debt you need to have a budget for monthly expenses, and a budget for paying off existing debt.

More Time Balance Transfer: Citi Diamond Preferred

Citi Diamon Preferred

We added the Citi Diamond to the list because it offers a 21 month 0% intro APR for purchases and balance transfers. You'll get a little bit more time to pay off your debt, with a 3% balance transfer fee. No rewards on this card. If you want to pay your balance off in full, you'll need to pay $150 a month to get down to a $0 balance by month 21. If you're still looking at making the minimum payment of $60, your ending balance at 21 months will be about $1,830 vs $2,650 with your existing card. 

Credit card debt is bad. Paying a bank over 17% interest on that credit card debt is worse. Not having a plan to pay off your debt is the worst.