Tuesday, February 11, 2014

Balance Transfers

How to Use Them Wisely

Get the best deal
Credit Card Balance transfers can definitely work to your financial advantage, and great deals do exist. After all, the less interest you are charged, the more of your payment is going toward the principal, allowing you to repay the debt efficiently. Look for balance transfer offers with:
  • The lowest introductory interest rate for the longest amount of time
  • A low post-introductory interest rate
  • No or low annual fee
  • No or low balance-transfer fees (which can be up to four percent, equaling $200 on a $5,000 balance)
Understand the terms
As with all contracts, make sure you are completely aware of the terms before you sign on the dotted line. Be sure you understand the rate and term of your balance transfer.

Avoid costly delays
Incomplete balance transfer paperwork can cause a serious delay, so make sure you fill in forms carefully. Continue to make the minimum payment on the old card while waiting for the balance transfer to take effect, which may take anywhere from two to four weeks. Finally, verify complete balance transfers with both your old and new card.

Don’t get into future debt
Transferring credit card balances makes the most sense when you are not going to acquire more debt and will concentrate on repaying what you owe. If you keep the old credit card open and use it to accumulate more debt, the benefit of the reduced interest rate is watered down by a higher overall balance. Cancel or suspend use of the old card(s). And since you will likely be charged a high interest rate for purchases you make with the new card, avoid racking up more debt on it as well.

Pen Air FCU offers a variety of loan options to meet your specific needs. Whether you choose to transfer your high-interest rate credit card balances to a Pen Air FCU MasterCard®, or consolidate your debt into one personal loan, we can help simplify your life to make budgeting easier so you can get back on track. 

For more information, visit penair.org/CreditCardscall 1-877-4PENAIR, or stop by a branch location near you.
Photo by realsimple.com

BALANCE 2013 ®

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