How to Transfer Credit Card Debt for Free

When we bought our first home, it took all we had—actually it took more than all we had. We ended up relying on credit cards to make it through our first winter with very high utility bills and the need for some efficiency repairs. The resulting balance we did our best to slide from interest-free card to interest-free card in an effort to keep it from snowballing into an insurmountable debt. It was during those slides I realized that I didn’t need to pay 3 to 5% to transfer our debt, I could do it for free and reduce that debt in the process.

How can you transfer credit card debt for free?

There is one free balance transfer card, the Chase Slate card, however, if you have a little time my method works for any card, so where do you start?

First, you need to determine how soon you need to move your debt. If you have a zero-interest period, for example, any balance remaining when that period ends will be charged interest in most cases from the date of the original purchase. This obviously doesn’t apply if you are simply looking to move high-interest balances to a lower interest card or take advantage of a zero-interest period.trasnfer credit card debt free consolidate debt

Second, find an appropriate card for the transfer. I prefer to choose cards with a good rewards system, a low after-introductory interest rate, or a bonus offer—all three is ideal. For example:

-The Bank of America Cash Rewards card offers a $100 cash back bonus for spending $500 within your first 90 days. It also provides 1% back on all purchases, 2% at grocery stores, and 3% at gas stations.

-The Capital One QuickSilver card offers $100 if $500 is spent within 3 months with 1.5% cash back on all purchases.

-American Express offers the Blue Cash Everyday with 1% back on all purchases and a $100 cash back bonus on purchases of $1000 or more in the first 3 months.

Discover It offers double cash back on your first year of earnings. For example, if you spend $2,000 in your first year, you’d earn 1% as you spent it, then a second 1% at year end.

These are all no-annual fee cards with cash back programs, but you can also look at other rewards types (though these do no reduce debt directly).

Next, pay all of your normal in-cash purchases with the new card. For example, I usually pay our electric, gas, phone bill, etc with our debt card. These set-bills are a good starting point, but you can also use everyday purchases, such as grocery trips.

Now, take the cash you didn’t spend in the last step and immediately apply it to the card you are transferring from. It is important you do this step, preferably right away, so that you don’t end up spending the cash on other things and simply gain more debt rather than transfer it for free.

That’s it. Sounds simple doesn’t it? But let’s take a hypothetical here on the savings possible with this method.

Say you have $1,000 in credit card debt you want to transfer. By not just initiating a balance transfer you avoid the 3 to 5% balance transfer fee. As 3% is the most common, we’ll call that $30 in savings on a $1,000 transfer.

Then, because all of your purchases are indeed purchases and not a transfer, you gain rewards on them. Almost all rewards programs offer a minimum of 1%. This adds another $10 in savings at least. If you managed to also grab a bonus offer, such as the $100 credit on $500 spent (this is a common offer) you reduced your $1,000 debt to $890 just by transferring it, while avoiding the $30 balance transfer fee. This doesn’t even consider the interest-rate savings that are possible. This technique can be used to transfer for free to consolidate debt or pay off student loans too.

But, a word of caution, this obviously requires good enough credit to get approved for a new card. It also requires being diligent about actually paying the cash you don’t spend on the original card. Finally, this will slightly impact your credit score if performed repeatedly because the number of open accounts on your credit increases and average account length reduces. However, it can be an effective way to reduce debt and transfer debt for free in a pinch.

When Do W2s Come Out? What About 1099 Tax Forms?

As December comes to a close its tax time again, and while some may be dreading paying taxes others are impatiently awaiting W2s or 1099s to file and so they can receive a big fat refund. This leaves two questions gracing Google quite a bit in December and January, when do W2s come out, and when do 1099s come?

When do W2s come out?when do w2s come out

Your employer or employers have until February 1st each year to mail your W2 form or forms to you. This does not necessarily mean you’ll receive your W2 by February 1st, but that it must be post marked by this date. Considering this, you can expect your W2 to come any time after December 31st when the tax year closes to around February 16th depending on mail speed. Most employers start sending tax forms out in the first week of January, however.

What if my W2 doesn’t come?

If your W2 has not arrived you should first contact your employer. It’s possible they had an incorrect address and the form was returned. After February 16th, if you have already contacted your employer you can contact the IRS at 800-829-1040.

When do 1099 forms come out, and what if mine doesn’t come?

1099 forms are commonly used for income from a source other than an employer. For example, freelancers usually receive 1099 tax forms rather than W2s. The deadline for post marks on 1099 tax forms is January 31st. If you haven’t received a 1099 you are expecting you should, again, first contact the payer of the income. After February 15th, you can contact the IRS at 800-829-1040.

How long do I have to file my taxes?

The deadline to file your taxes or request an extension is April 15th. This means any mailed tax returns must be post marked by this date. If you are not able to file yet because of missing W2s or 1099 tax forms you need to contact the IRS at the number listed above before the deadline to file passes. You can file your federal taxes without a W2 or 1099 with the help of the IRS.

When can I expect my refund after I file my taxes?

When you receive your refund will depend on when your return was accepted by the IRS. In general, refunds are received within 21 days of receipt. You can check the status of your refund at the IRS Where’s my refund website.