Three Reasons why a Balance Transfer is Right for You
Balance transfers are a great financial tool for some consumers. However, like anything else, balance transfers may not be right for you and your particular financial situation. So, how do you decide if a balance transfer is right for you?
- You are having difficulty keeping track of your credit card payments – If you have more than a couple monthly debt obligations, such as credit cards, car loans and personal loans, a balance transfer may be a great idea because it allows you to consolidate all of your higher-interest rate loans onto one, competitive-rate credit card. So instead of juggling a number of payments each month (and risking forgetting one), transferring your balances onto one credit card can save you time and money and eliminate much of the hassle associated with monthly bill payments.
- You are paying high interest rates and have been unsuccessful at negotiating lower rates – If you have a credit card or two that has a high interest rate, and you have been unsuccessful negotiating lower rates, it may be time to break off your relationship with your credit card company and instead choose another credit card with an attractive balance transfer offer. Many people choose balance transfers to move their credit card balances from high-rate store cards onto one credit card with a lower interest rate, thereby making the process of paying off their debt a much easier one.
- You have a payoff game plan – The only time it makes sense to take advantage of a balance transfer offer is if you have a realistic game plan for paying off that debt once the balances are transferred. It just doesn’t make good financial sense to shop for a new credit card with a new balance transfer offer every six to 12 months when your current credit card’s promotional rate has ended. Instead, find a good credit card with a great balance transfer offer and work to pay off that debt during the card’s promotional period. Make sure your repayment plan is realistic and make a commitment to sticking to your game plan so you can enjoy life without debt.
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