If you’re carrying a balance on a credit card with a high interest rate, paying that debt down can feel like an endless journey. That feeling multiplies if you’re repaying multiple high-interest accounts. So, how do you regain control of your finances and solidify your plan to pay off your debt? A credit card balance transfer might be the answer for you.
What are credit card balance transfers?
A credit card balance transfer does just what its name implies — it transfers the balance on a credit card or credit account to another account. Not only does this allow you to take advantage of lower interest rates on a new credit card, it also helps consolidate your balances into one comprehensive account. This can put you on the fast-track to repaying your debt while saving money on monthly payments.
Transferring is NOT the same as repaying.
First things first, a credit card balance transfer is not the same as paying off your credit card debt. Just because your credit card statement says zero doesn’t mean you’re out of debt. Credit card balance transfers are just that, a transfer. The amount you owed on credit card A is simply reassigned to credit card B.
You can consolidate your payments.
If you’re making minimum monthly payments on multiple credit accounts, consolidating those accounts with a balance transfer to a single credit card can help simplify your repayment plan. One statement, one payment, less worries.
Save on interest rates.
No matter where we are in life, one thing’s consistent – we all want to save money. If you’re paying high interest rates on credit cards or other credit accounts, transferring that amount to a lower-interest card can help you do just that. Just be aware, that many credit cards charge balance transfer fees. Find out first how much those fees are, and if the interest savings outweigh the total fees you’ll incur.
Commit to making on-time payments.
The benefits of credit card balance transfers are undeniable. But, those benefits are dependent on you and how you use your credit. When you transfer your credit card balance, especially to a card with an introductory or special offer, it’s important to make on-time payments your priority. Missing a payment could mean those offers being canceled.