If you have a balance on a credit card with a high-interest rate, paying it down can feel overwhelming. How do you gain control of your finances and solidify your plan to pay off debt? A credit card balance transfer could be a solution to consider.
What is a credit card balance transfer?
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. You can move your higher-interest balances to a credit card with a lower interest rate to help pay off debt.
With a balance transfer, be sure to update your debt snowball plan to show your consolidated balances with the lower interest rate.
The benefits of credit card balance transfers
Save on Interest: If you've been dealing with high interest rates on your credit cards or other accounts, moving that balance to a lower interest rate can help save money. Keep in mind that some credit cards may have balance transfer fees. With the FAIRWINDS Cash Back Visa® Credit Card, the balance transfer fee is waived for new cards for 12 months from account opening.
Simplified Payments: You can streamline your credit card payments by transferring all your credit card balances to one card, as long as the total balance is within your credit limit. This makes it much easier to pay off your debt in one place, with only one statement and one payment to worry about.
Have a Clear Goal: Many balance transfer offers have a specific time frame where you receive the promotional 0% APR (Annual Percentage Rate) or low-interest rate.This can motivate you to pay off your debt as quickly as possible within that time frame, providing a clear goal to work toward.
Create and commit to your plan
Review your interest rate: When you're moving your balance to a new card, make sure to check the interest rate, especially after the introductory period is over. With some credit card rates as high as 24.00% APR, it's best to switch to a card with a lower APR than your current one.
Set a strategy: The key is to continue making payments on time. If you decide to transfer your credit card balance to a card with an introductory or special offer, it's crucial to make on-time payments a top priority. Missing a payment could mean losing out on those offers.
Set up auto-pay: Set up your credit card to be paid automatically for the statement balance. This can help you to avoid accidental late payments and interest charges after the introductory rate expires.
Make extra payments: Be sure to make extra payments to help pay down your debt as quickly as possible while you have a lower interest rate. The faster you pay down your balance, the more you will save in interest over time.
Ready to start taking down your debt? Explore some of the best balance transfer credit cards from FAIRWINDS to help you reach your goal faster.