Credit Card Balance Transfers

 

Oh, the holidays. My credit cards get used more between November 1 and December 31 than the rest of the year altogether! If you are anything like me, the end of the season has you looking at those balances and wondering how long it will take to get them down to even pre-festive levels. Maybe we need to think about a balance transfer?

What Is a Balance Transfer?

A credit card balance transfer allows you to move debt from one or more high-interest credit cards to a new card. Instead of paying multiple lenders at varying rates, your balances are consolidated onto a single card – giving you one payment to make.

Key Advantages of Balance Transfers

Save Money

One of the biggest benefits of a balance transfer is the potential to save money on interest. Putting your balances on a card with a lower interest rate means more of your payment goes toward reducing the principal balance instead of finance charges.

Pay Down Debt Faster

With less interest accruing, you can make more progress paying down your balance. This can help you become debt-free sooner—especially if you pay more than the minimum payment on the new credit card each month.

Helpful hint: This only works if you aren’t racking up charges on an old card after you’ve transferred its balance.

Ease Stress

Juggling multiple credit card payments can be stressful. A balance transfer combines balances into a single monthly payment, so it’s easier to stay on track and avoid missed payments. Seeing the progress you are making in paying down your debt can give you peace of mind.

Potentially Improve Credit Score

Paying down credit card balances can improve your credit utilization ratio, which is an important factor in your credit score.

A Few Things to Keep in Mind

* Understand any balance transfer fees – they are usually based on the amount you are transferring (at OFCU, we don’t charge a fee for that)

* If you have a promotional rate, be sure you know when it will end

* Avoid adding new debt to old cards after transferring balances

* Make consistent, on-time payments

Is a Balance Transfer Right for You?

A balance transfer can be a great option if you’re ready to consolidate and pay down your credit card debt. 

Use this handy calculator to see how much money you can save on interest and how long it will take to pay down a balance. Still not sure? Get in touch and one of our loan specialists will be happy to go over options with you!

Click here to learn more about the OFCU Visa and to apply.