3 Reasons to Take Advantage of Balance Transfer Credit Cards

Smiling woman shopping online with a credit card.

Are you ready to pay down your high-interest credit card balance and save on interest fees? If so, consider taking advantage of balance transfers. Balance transfers give you the chance to move high-interest credit card balances from one card over to a different card with a low or zero percent introductory APR period, which can reduce how much money you owe in interest. 

Learn why and when it can be important to take advantage of balance transfer credit cards – and how they can ultimately save you money and stress.

What is a Balance Transfer Fee?

In exchange for taking on your debt, credit card issuers will often charge you a fee, which is known as balance transfer fee. Typically, balance transfer fees range from 3 to 5 percent of balance transfer amount. 

Let’s say you want to transfer a credit card balance of $3,000 to a new card that has a 3 percent balance transfer fee. You’d have to pay a fee of $90. The good news is there are some lenders, such as TwinStar Credit Union, that have zero percent balance transfer fees.

Now that we’ve covered what a balance transfer fee is, let’s discuss why you should take advantage of balance transfer credit cards. 

1. Take Advantage of Low or Zero Introductory APR

One of the main reasons people choose is balance transfer credit cards is to capitalize on low or zero percent introductory APRs. This enables them to transfer high-interest debt to a new card so they will pay less interest in the long run while repaying their debt quicker. 

Because credit card charges are unsecured loans, financial institutions are able to charge high interest. However, a balance transfer can allow card holders to have a low or no interest charge for a period of time while paying off debt.

2. Consolidate Your Debt

Depending on your card’s credit limit, you might be able to transfer multiple credit card balances to your new credit card. By consolidating multiple payments, you only have to deal with one monthly payment, which should make things easier for you to track and less likely to be late or miss a payment.

3. New Card, Better Perks

In addition to a great introductory rate, a new card can offer better perks and rewards. Do your homework and try to find a card that gives you more, whether it’s discounts, cash back, or reward points.  

Changing credit cards and transferring doesn’t only make financial sense – it can also provide you the opportunity to get more from your new card compared to the previous one. 

The Bottom Line

A balance transfer is an excellent option if you are struggling with loan payments or credit card debt. They can offer a reprieve and the opportunity to consolidate finances. That said, it's important to remember that though these cards may have low or no balance transfer fees, they can come with high APRs.

Be sure to shop around and find the best terms and lowest interest rate available to you. Also, when using no balance transfer fee cards, make sure you can pay off the balance before the promotional period ends. Doing so will help you avoid incurring hefty finance charges.

With proper research and understanding of what is being offered by different lenders, you can take advantage of balance transfer fee credit cards. 

Apply for a TwinStar Visa® Credit Card Today

Whether you need to build credit or have established credit, we have the right Visa® credit card for you. Take advantage of no balance transfer fees, special introductory rates, low APRs, no or low annual fees, and 24/7 fraud protection.

To learn more about our Visa credit card options or apply for a credit card, visit TwinStarCU.com/Visa.