How a Balance Transfer Can Help You Manage Holiday Debt
It’s easy to get carried away with your spending during the holiday season. Between seeking out the perfect gifts for friends and family, traveling to spend time with loved ones, meals while out on the go, and even more holiday hustle and bustle, your wallet may still be recovering even months after the festivities have ended.
If this sounds all too familiar, there’s no need to fret. Transferring your current credit card balances to a new card with a lower interest rate could be your saving grace to staying out of holiday debt.
Essentially, a balance transfer allows you to use a new credit card to pay off your existing balances on the old one at a more manageable interest rate. If you have balances on multiple cards, transferring them all to one card will allow you to consolidate to one easy payment and simplify your monthly bills.
Some credit cards even offer a lower introductory rate on balance transfers made during a special promotional offer. You just want to make sure you get your balance paid off before the introductory period ends and your interest rate goes up! After all, that’s the main goal of a balance transfer; to make it easier to pay off your debt.
If a balance transfer seems like the right choice for you, here a few things to consider:
Balance Transfer Fee
Finding a credit card with no additional fee for balance transfers is the best option, so make sure you do your research when shopping for cards so you can be sure you choose the right one. Our Robins Financial Credit Union Visa® Platinum Rewards Credit Card has no balance transfer fee.
Annual Fee
Again, a credit card with no annual fees is the ideal option for a balance transfer. Our Robins Financial Credit Union Visa® Platinum Rewards Credit Card has no annual fee. No additional fees means you save even more.
Interest Rate
The lower the interest rate, the more you are saving by transferring your balances. If you take advantage of a special promotional offer with a limited-time lower interest rate, pay careful attention to what the interest rate will increase to when the promotional period is over. You’ll want to make sure you get your balances paid off before the interest rate increases, especially if it will shoot up drastically at the end of the promotion.
Make a Plan
The most important thing when considering a balance transfer is to make a plan. Balance transfers are an excellent tool to help you manage your debt, especially if you’ve racked up a few too many credit card purchases during the holidays. But it’s important to take the time to crunch some numbers so you can make sure a balance transfer is right for you. If you’ve made several large purchases on high-interest cards, a balance transfer can help you get your holiday debt under control.
Depending on the total amount of your current credit card balances, as well as your credit score, you may not be able to transfer your entire credit card debt to the new card. Make sure you thoroughly review your agreement and ask any questions you have so you know exactly how much you’ve been approved for. And remember to keep an eye on your existing accounts until the balance transfer is finalized. If you have a bill due on your current cards before your balances have transferred, you still have to pay it by the due date.
Make sure you include monthly credit card payments in your budget. Try to pay off as much as you can afford each month so your debt will be paid off before the interest rate increases. Even if you aren’t able to pay your full debt off before the introductory rate expires, as long as your new card has a lower interest rate than your original debt, you are still saving money and getting your debt under control. If you can’t afford to pay down your balance that quickly, you still need to make your minimum payments each month. If you miss payments or make late payments, you will have to pay additional fees for late or missed payments.
Our Robins Financial Credit Union Visa® Platinum Rewards Credit Card gives you premium purchasing power with no balance transfer fee or annual fee, and we offer convenient payment options to help make your life easier. If you’re considering a balance transfer, check out our Credit Card Payoff Calculator.
If you’re ready to make the transfer, you can apply online today, over the phone or by visiting any of our branch locations to start taking control of your holiday debt.
Terms and conditions apply. Subject to credit approval. Visit robinsfcu.org for additional information.