If you're carrying credit card debt, a credit card balance transfer could help you save money and pay what you owe faster. Transferring existing debt from a credit card with a high rate to a card with a lower rate allows you to reduce interest and monthly payments, so that you can pay off your balances sooner.
Let’s break down what a credit card balance transfer is, how it works, and when it might make sense for you.
What Is A Credit Card Balance Transfer?
A credit card balance transfer lets you move existing debt from one credit card to another, often to a card with a lower interest rate or even a 0% introductory rate. This strategy can reduce your interest charges and help you get a handle on your finances. With lower interest, more of your payment goes toward the original amount of money you borrowed (the principal balance).
You can save hundreds of dollars in interest (or even more, depending on the amount you owe) by taking advantage of the low or 0% period and utilizing an aggressive debt paydown strategy during this time.
What Are The Benefits Of A Balance Transfer?
How To Choose The Best Balance Transfer Credit Card
When searching for a balance transfer credit card, it's important to evaluate several key features to ensure you're making a smart financial move. Start by looking for 0% balance transfer credit cards that offer an introductory APR period of at least 12 to 18 months — this gives you a fair amount of time to pay off your transferred balance before you start accruing interest.
Be mindful of balance transfer fees, and check if there are any transfer limits that might affect your ability to consolidate debt. Comparing offers side by side can help you identify cards with the most favorable terms, such as low ongoing APRs, minimal fees, and flexible repayment options.
Most top-tier balance transfer cards require a good or excellent credit score, so it helps to know your score before applying to increase your chances of approval.
Tips For A Successful Balance Transfer
Effective balance transfer strategies can help you save money and pay down debt more efficiently, but success depends on following a few key guidelines. Here are the dos and don’ts of a successful balance transfer:
Dos
Don’ts
The Bottom Line
When done right, a credit card balance transfer can be a game-changer for your financial health. Use our Credit Card Balance Transfer Calculator to see how much you could save by transferring high-rate credit card balances from other qualifying financial institutions to a new BCU credit card with 0% introductory APR!
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