Interest is the financial phenomenon that keeps you in credit card debt. So, avoid it like the plague.
Understandably, it is difficult for many people to pay off all debt at once, which is why the Barclaycard Ring MasterCard deserves a mention. The card’s benefits get you on a path towards a debt-free life, mostly due to its no-fee balance transfers and low 8% APR.
What are balance transfers?
Balance transfers allow you to pay off one card’s balance by borrowing against another credit card, hence the transfer of the balance. They can be used to turn high-interest debt into low-interest debt. They can help you push balances to 0% intro APR credit cards. But, typically, the credit card receiving the balance transfer will charge a balance transfer fee of about 3% of the transferred amount.
So, free balance transfers — a rare perk found with the Barclaycard Ring MasterCard — open doors to a little financial creativity.
We show you a few ways that the card can be used to cut down on your interest payments:
1. Debt consolidation
What you’re doing essentially: Use free balance transfers to consolidate debt under a low APR.
Got a disturbing amount of high-interest credit card debt? Here comes the Barclaycard Ring MasterCard to save the day. Rather than paying interest at those high rates, simply consolidate those balances through the Ring MasterCard. You won’t be paying interest at whatever the APR may be on your other credit cards.
Additionally, there’s the side benefit of having just one credit card bill to manage. As a fan of minimalism, especially when it comes to personal finances, I believe that having a single payment is conducive to successful debt reduction.
Okay, admittedly, this “tip” is very much a no-brainer for a credit card that never charges balance transfer fees. But, it’s worth mentioning because so many people only use balance transfers to delay debt repayment. It involves transferring a balance to a new credit card with a 0% introductory APR. Unless the intro offer included free balance transfers, you would be stuck with a balance transfer fee. A vicious cycle ensues when you’re only making the minimum payment and racking up balance transfer fees.
Don’t try to delay the inevitable. Consolidate your debt with the Ring MasterCard and make a solid effort to eliminate debt (not hide it inside some imaginary sock drawer).
2. Enjoy rewards at a low APR
What you’re doing essentially: Disregarding the high interest rates on your rewards credit cards.
If you didn’t know already, credit cards that offer rewards will often carry a higher interest rate. You’d be hard-pressed to find a card that can dole out generous rewards alongside a low APR — especially difficult to find with travel credit cards.
With the Barclaycard Ring MasterCard, that reality is possible.
You’d spend as you would with an existing rewards credit card and then transfer your balance to the Ring MasterCard — for free. You can disregard your rewards credit card’s interest rate because the 8% APR on the Ring MasterCard is what applies to that balance.
Sure, I would normally say that you should not be wielding a cash back credit card if you’re going to carry a balance. But, in the event that you have to do so, you’ll have the Ring MasterCard to minimize the amount of interest that you’d have to pay.
3. Skip out on 20 to 25 days of interest
What you’re doing essentially: Gaining the privilege of an interest-free grace period. (Applies only if you perform the balance transfer at the end of the grace period.)
Having to incur interest charges is the worst part of carrying a balance — it is inevitable. But, with the Ring MasterCard, you can dodge at least 20 days of interest charges!
When you pay off a balance with a balance transfer at the very end of another card’s grace period (usually the 20 to 25 days following the end of the billing cycle), that balance did not accrue any interest. Interest is not charged on purchases when balances are paid off in full by the due date. Your other card’s balance was technically “paid off” by the balance transfer. So, no interest accrued.
However, if you didn’t pay off the other card’s balance and you held the balance on the other card, you would have accrued that 20 to 25 days’ worth of interest.
In fact, Ring cardmembers have the ability to connect their other credit cards so that they are alerted to the due dates of these other cards. You would be offered the option to perform a balance transfer.
How much interest can you avoid realistically? It may not look like much, but it matters in the long run.
I’ve made a chart to show examples of how much interest you would have paid during the grace period (the same amount you would have avoided with a free balance transfer):
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