What Is A Balance Transfer & Is It Right For Me?

A balance transfer allows you to move the money you owe on one credit card to a different credit card with a lower interest rate. By moving that balance, you’ll save money in the amount of interest you pay and you could pay off your debt sooner.

When should I consider a balance transfer?

You may consider a balance transfer when:

• You have a balance with a high interest rate. A balance transfer could save you money when you move that balance to a different card with a lower interest rate.
• You want to simplify your monthly payments. When you transfer multiple high-rate credit card balances to one card, you’ll only have one monthly payment to manage.

How do I get the most out of a balance transfer?

Here are a few tips to get the most out of a balance transfer:

• Balance transfer fee. Some credit cards charge a balance transfer fee, often 3% to 5% of the amount you transfer. Look for a card that doesn’t charge a fee to move your balance.
• Ask about the minimum payment. While it’s best to pay more than the required minimum payment, you should be aware of what the minimum payment is. While some card issuers may only require 1% of your balance as the minimum payment, others may set theirs at 3% of your balance – helping you pay off your debt faster, even while making the minimum payment.
• Set a goal to pay off the transferred balance. Many cards offer a special rate on balances transferred for a set amount of time. Pay as much as you can during that time to chip away at your debt at a lower interest rate. Ideally, set a goal to pay off the balance during that promotional period.

If you’re trying to get ahead financially, paying off high-rate credit cards is a great place to start. To learn more about balance transfers and how much you could save, we invite you to visit your local Heartland branch, located near Festival Foods and the Blue Heron Grill.