6 Factors to Consider with a Credit Card Balance Transfer
Do you have more than one credit card that has an outstanding balance? If you are tired of making multiple monthly payments or are concerned about the high interest rate on one (or all) of your credit cards, you may want to consider a credit card balance transfer.
Moving outstanding debt on one credit card to another card is a balance transfer. Credit card balance transfers are typically used to move the amount a consumer owes on one credit card to one with a lower interest rate and/or better benefits. Keep in mind, transferring debt is not the same as repaying debt. You still owe the money, just on a different line of credit. Below are some of the factors to think about when considering a credit card balance transfer.
- Keep balance transfer fees in mind. Often transfers involve a fee, but with a credit card from WESTconsin, you can transfer your balance with no fee! If the card you are considering transferring to does have a transfer fee, the upfront cost may seem high, however, moving to a lower rate card can potentially save you more money in the long run and may offset the cost. To help determine the potential savings a lower rate can save you, use a credit card payoff calculator
- Consolidating your credit card debt onto one card can make managing your finances easier! Keeping track of just one card rather than many could help you avoid late fees and will provide you with a clearer picture of your overall finances. You can more easily see all accrued debt and determine how you can best most forward with future purchases. If you already use WESTconsin Online or our Mobile App, your WESTconsin Platinum Visa may be easier to access than other cards when you want to view activity, make payments and retrieve statements as well.
- Understand the rates and fees of the new credit card. Is there an introductory rate? What is the annual percentage rate? Is the rate different for purchases, transfers, and cash advances? Are there any penalty fees? Take the time to plan how quickly you can pay off the card or what you will use it for, which can help determine the rates and fees that will be the most important to you.
- Avoid credit cards with a vague or indefinite 0% period. A transfer may be advertised at a 0% rate on balance transfers for 6 or 12 months. If you are not certain about the length of time of the 0% interest rate before making the balance transfer, you may discover it is shorter than you need.
- Take rewards programs or other incentives into consideration. As an example, our WESTconsin Platinum Visa card offers a free uChoose Rewards program where you can earn points redeemable for merchandise, gift certificates, travel rewards, and cash back as a statement credit. Another advantage of a WESTconsin Platinum Visa is a potentially lower credit card rate if you are a Silver MVP or Gold MVP member.
- Transferring credit card debt may impact your credit score. The impact to your credit score will be different if you transfer the debt to an existing card compared with opening a new one. It may also make a difference if the transferred debt will use a substantial portion of the available credit on the new card or not. If you’ve decided to close a card after transferring credit, a card closure may impact your credit score as well. However, while your credit score could take a dip if you do a balance transfer and/or close a card, you will see a positive impact on your credit score over time when you pay down debt.
WESTconsin Platinum Visa credit cards give you worldwide acceptance, the most competitive interest rates, no annual fee, uChoose Rewards, and Membership Value Pricing (MVP) benefits. Now is a great time to transfer balances from your credit cards with higher interest rates!