Knocking Out Debt With a Balance Transfer
It’s easy to go overboard with holiday spending and leave yourself with a mountain of debt when it’s all said and done. A credit card balance transfer can help get your finances back on track in the New Year. This opportunity will help you consolidate your debt into a single payment and may even land you with a better interest rate. Reducing debt is beneficial all on its own, but there are other benefits of a credit card balance transfer that you may enjoy.
It’s important to avoid cards with high interest rates, excessive fees, minimal to no grace periods, or rewards program that you won’t use. Finding a credit card that best fits your needs will benefit you in the long run. Think about switching to a credit card with positive benefits such as better rates, a rewards program that actually interests you, discounts, and so much more. Reward yourself with a credit card that comes with features and benefits that help you make the most of your card.
Lower Interest Rate
Most of the time, financial institutions will offer low-interest balance transfer specials. This is one of the biggest advantages of credit card balance transfers, especially if you have a credit card that carries a high interest rate. The lower your interest rate, the more money you can save or use elsewhere. Most promotional offers have a special limited-time rate, so it’s important to do your research and know exactly when the rate will expire. This will help you stay on track to get your balance paid off before the promotional period ends.
Consolidating Is Convenient
Many people carry multiple credit cards. This isn’t necessarily a bad thing, but multiple balances can add up and quickly become unmanageable if the cards are abused. A credit card balance transfer can help to consolidate your multiple payments into one lump sum payment. Paying off one card is more practical than worrying about details of multiple cards. Having one monthly payment makes it easier and more convenient for you to keep up with payments and reduce the chance of you getting behind.
Build Up Your Credit
Your credit card utilization ratio is a major factor in determining your credit score. When you transfer your balance from multiple credit cards to a single card, you could end up decreasing your overall credit utilization. This ratio accounts for 30% of your score calculation and measures the percentage of credit you use out of your total credit limit. The lower you keep your utilization ratio, the better, because it will most likely increase your credit score. A low credit utilization reflects to credit lenders and the credit bureaus responsible for calculating your credit score that you aren’t racking up credit card debts you won’t be able to repay. Experts recommend maintaining a credit utilization below 30%. Therefore, transferring your credit card balances can reduce your overall credit utilization and pave the way to increase your credit score.
Applying for a credit card balance transfer is easier than ever. We now have a self-service balance transfer form within Digital Banking. You no longer have to call or come into a branch to transfer your credit card balances; you can simply fill out your information right from your phone or computer, making it easier and more convenient than ever. Log in to Digital Banking, select Cards in the main menu on the left, select Balance Transfer, enter the information, and submit. That’s it! Let a fee-free balance transfer to our Visa® Platinum Rewards Credit Card put you on the road to recovery from credit card debt.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.