Understanding Balance Transfers

• 2/16/2016

A balance transfer is moving part or all of the balance (debt) from a high interest credit card to another credit card with a lower interest rate. It’s one way to reduce and manage credit card debt and consolidate your debts into just one payment.

Many people have department store credit cards with interest rates ranging from 18% to as high as 26.99% annual percentage rate. If you have one or more of these, you will pay a lot of extra money each month if you don’t pay your balance in full.

When you transfer your balance from one of these cards to a Truity Visa with a 1.99% APR,* more of your payment will go towards paying down the balance, as opposed to paying the interest.

If you can pay more than the minimum payment due, you can make a lot of progress paying down your original balance. In addition, consolidating credit card debt makes it easier to remember due dates and avoid missing payments.

“Keep in mind that there is a 3% balance transfer fee here at Truity Credit Union,” said Vice President Rona Shoopack. “On a $2,000 balance transfer, that fee is $2,000 times 3% or $60.”

If you have a lot of debt you want to consolidate, a personal loan may be a better option. Contact us and we’ll be happy to take a look at your situation and help you find a way to pay off your debt.

 

 

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