Debt sucks. It’s like a black hole into which is sucked not just your money, but your freedom as well. I would much rather be owed than to owe. When you are beholden to someone, you are at their mercy. They own you.

In the case of credit card debt and credit line debt and other loans, there is a huge financial implication, but the principle is the same as any other debt. You are beholden to the credit card company or loan issuer, and no matter what else you want to do with your money, you better pay them off first.

Being debt-free is one element in increasing happiness, so paying down debt – especially high-interest credit card debt – is a big practical opportunity. But paying down debt is tough, especially when each month the interest is using up so much of the money you would want to use to pay down the debt.

Enter the balance transfer credit cards. This is typically an offer that would read something like this:

Transfer your credit card to us, and for the next six months you will pay no interest.

Or…

Transfer your credit card to our card, and for the next 12 months you will pay just 1.9 percent interest.

This sounds pretty seductive, especially if you are now paying 14 percent or 16 percent or more. Just think of all the things you could do with that extra $300 or $400 or $500 a month that you will save on interest.

STOP!

Don’t think about “all” the things you can do with the money you save on interest. Think about just ONE thing you can do – pay down the debt.

If you are saving $300 per month, that means you have $300 to pay down the debt. At the end of six months, you will have paid off $1800 of debt. Why is this important? Because at the end of six or nine or 12 months, full interest rate will kick in. If you can pay a lot of the debt down while the balance-transfer effect is on, you’ll be much less indebted in the future and you’ll be much better positioned to continue paying down the debt so that you will never be owned by anybody again.