. Balance transfers are what they sound like: You move your outstanding debt balance from an old card to a new card, and with 0% teaser interest rates, you don't have to worry about interest payments, at least for a while.
Similarly, if you're consistently withdrawing from retirement savings or using a credit card to cover bills, you probably need to reassess your finances.The higher your debt-to-income ratio, the more of your earnings go toward debt. By having a significant portion of your income tied up, you have less flexibility to cover unexpected or emergency expenses.
Lenders like to see debt-to-income ratios lower than 36% when considering applications for loans, so it's a good benchmark to use when looking at your budget, although"the lower, the better," says Tim Melia, a CFP with Embolden Financial Planning.Whatever your debt total, your ability to eventually pay it off will depend on"decreasing discretionary spending or increasing income," says Melia.