Performing financial transaction on mobile phone

Things to Know Before Making a Credit Card Balance Transfer

Paying off a credit card balance with a high interest rate and large balance can be quite daunting, particularly if you are only able to pay the minimum amount due each month.
One strategy to pay off credit card debt is through a credit card balance transfer from a high rate card to one with a low or 0% interest rate. If you aren’t careful though, and don’t watch the fine print, you could end up paying more than if you stayed put. And, you could damage your credit history if you don’t approach this strategy correctly.
Before you begin transferring balances, be sure you understand the fine print. Here are five things to know before beginning a credit card balance transfer.

Know the cost of the transfer

A 0% offer is quite enticing if you are carrying a high balance. Be sure to read the fine print and understand what the cost of that transfer is. Most credit card companies charge a fee for the balance transfer, upwards of 5%. If you are transferring $2,000, that’s $100 that you’ll be charged right away. If you don’t pay off the balance in the time allotted, an interest rate kicks in. Ultimately, you’ll want to decide if that fee with future interest rate puts you in a better position than if you never did the transfer. Work the numbers and check with us if you need assistance understanding what’s best for your situation.

Look for lengthy introductory periods

0% for a long period of time is always better than a low rate for a short period of time. Compare offers and find one that will allow you to pay off your entire balance before the introductory period expires.

Only apply for one or two cards

To be approved for a card with the most enticing balance transfer offer typically requires excellent credit. Be sure you can qualify before you apply.

Apply now for a Visa credit card

Don’t use your new card

Avoid the temptation to use your card for new purchases. Often those purchases will be at a higher rate, putting you back in the same cycle as before.

Have a plan and stick to it

The purpose of your new credit card is to pay off debt. Set a budget for how much you will pay each month so that you can pay off your balance during the introductory period. If needed, set up an auto transfer from your checking account or online bill pay to pay your credit card bill each month so that you are less tempted to use those funds.

If you have questions about how to approach a credit card balance transfer, please call us or stop by a branch. We're here to help.

1st United Credit Union cannot give financial, tax or legal advice, please consult a tax adviser or investment adviser to assess your situation.

Recommended for You

pie chart with coin icon illustration

Today's Rates
Don't miss out on our competitive rates.

handshake icon illustration

Meet Us
We're your neighbor! Learn how we put our members and community first.

credit card icon illustration

Credit Cards
Purchase what you need, when you need it, with great rates.

Debt calculations

Your loan – personalized!

Whether you're planning your next vacation, staycation, home remodel, or simply want to consolidate debt, we have the financing for you.

Personal Loans