Smart tips for balance transfers
(Richmond, VA, October 24, 2012) – Carrying a balance on your credit card? You may find that transferring the balance to a lower rate card may help you save money. It could enable you pay off the debt faster or reduce your payments. But consumers should be alert to the required disclosures that accompany balance transfer offers. Here are some tips for being smart about transferring a credit card balance:
- Make sure the rate offered on the balance transfer is much lower than your card’s current rate.
- Determine the length of the balance transfer offer and whether or not you can make a significant difference in paying down the card balance during that time.
- Beware of balance transfer fees. Some lenders charge a 3% - 5% up-front fee, which adds to your total cost. For example, a 3% fee on a $4,000 credit card balance adds $120 to your upfront cost.
- Look for a card with no annual fees that also offers a good rate for new purchases.
- Don’t run up additional balances on old cards once you have transferred the balance. Consider closing some of your old cards, but be aware that closing credit accounts may lower your credit score in the short term.
Contact your financial institution to see if a balance transfer offer is in effect and if you qualify.
As a member-owned financial cooperative with 220,000 members, Virginia Credit Union provides a variety of affordable banking services, loans and mortgages, checking and savings services, and financial education resources. Virginia Credit Union is federally insured by NCUA and an equal housing lender.
Media Contact: Glenn Birch, firstname.lastname@example.org, (804) 560-5664