Have you ever been persuaded into opening a store credit card to get money off your purchase but then realize it has an incredibly high-interest rate? It happens, and sometimes you even end up opening multiple credit cards at different stores. After your balances add up, you’re left wondering what the best way is to pay them off.
This is where a balance transfer comes in handy!
Balance transfers are the process of combining credit card balances onto one card. Putting all your balances into one location makes them easier to pay off by having only one payment with a single lender, generally at a lower interest rate. Below are the steps you need to take to complete a balance transfer:
- Figure out the total amount of the credit card balances you’d like to pay off.
- If you’re planning on transferring the balance to a credit card you already have open, make sure you have enough available credit to accommodate the balance transfer. If you don’t, check with your lender about increasing your credit limit, as needed.
- If you plan on getting a new card, make sure you apply for enough credit. When comparing credit card offers, pay special attention to balance transfer rates and fees. However, be cautious of any promotional “teaser” rates that hike up your fees and interest if you miss any specific criteria, such as making a late payment or not paying the balance off in time.
- Ask your financial institution to issue you cashier’s checks to pay off your other credit cards. They may even mail the payments for you or place the funds in your checking account to make the payments yourself using electronic bill-pay options.
If you are looking to combine your credit card balances to a card with a low-interest rate, American 1 Credit Union offers free balance transfers! Apply today!
« Return to "American 1 Blog"