Balance Transfer: Many credit cards have promotional offers for a 0% APR balance transfer
Every month you have to pay your credit card. As long as you pay it off in full, your credit card company rewards you with a 21 day grace period to pay your bill without charging you any interest. We can take advantage of this.
Let’s say your statement date is on the 1 st of every month. All new purchases starting on the 1 st will appear on the next month’s credit card statement. That’s about 30 days, but let’s say 4 weeks to make it easy. Additionally, you get a 3 week grace period to pay your bill before the credit card companies start charging you interest (finance charges). That gives you 7-weeks of being able to use your credit card balance without having to pay any interest. When compared to the interest rate of Cash App Loans, this is a significantly better deal.
#2 Credit Cards with 0% APR
If you need an interest free loan to get by, I would highly recommend using a 0% APR credit card (see: Hacking Your Debt). Just remember not use go over your credit utilization if you want to maintain a healthy credit score. But, I’d rather have a lower credit score for a few months than to pay any additional money to finance charges.
A majority of the 0% APR credit cards even give you a sign up bonus as a statement credit. Who doesn’t like free money, right? The 0% APR credit cards on this list have 0% APR available for 12 to 20 months. That’s a pretty good loan. But if you need “cash” to pay a bill, there’s still more to learn. As I mentioned earlier, you can use bill paying services like Plastiq (2.85% fee) to pay your rent, utilities, tuition and most other bills (not credit cards).
With your 0% APR credit card, you can use Plastiq to pay your bills (for a 2.85% fee) to get you through the tough times. That’s a pretty good deal which beats most loans. Let’s say after a year you still can’t pay off your credit card and bills. I know, it’s tough but this is an affordable solution: Get another 0% APR credit card. More credit cards CAN be the solution.
I’ll dig into more details in the next section, but with another 0% APR credit card, you can send a relative (or trusted friend) money with a credit card through PayPal (2.9% fee) which they can convert to cash for you. With that money, you can pay off the credit card with upcoming interest. In a sense, you’re just juggling debt and optimizing your loans. Alternatively, many banks offer balance transfers for 2% to 3% to help you pay your bills. It’s provided to you as a physical check.
Obviously, going into debt is always bad. But when times are tough, you can’t help it. You need a little loan to get you by, so why not do it in the most effective way possible.
Cash Advance: If you directly withdraw money from your credit card, it’s going to be a cash advance that comes with high fees and interest. This is not a good idea, but keep reading for the cheaper alternatives.
The bank will provide you checks you can use to pay off any other debt (like other credit card bills). Just be aware that each balance transfer typically has a fee of 3%. I have seen some balance transfers as low as 2% but it depends on the bank installment loans company in Oklahoma.