Household debt continues to increase across the U.S. and some Americans are trying to learn more about how to transfer credit card balances and the possible savings they may experience by switching to a credit card with a lower annual percentage rate (APR).
According to an Experian credit bureau report, consumer debt steadily rose from $14.14 trillion in 2019 to $16.18 trillion in 2022. Georgia residents reportedly carry the highest non-mortgage-related burden at $45,780 with South Carolina not far behind at $43,180 per household. If you're considering a credit card balance transfer as a debt reduction strategy, explore how to transfer your credit card balances and learn how to tell if it's the right solution for you.
Here's How to Transfer Your Credit Card Balance
Conducting a credit card balance transfer involves moving debt from one source onto your credit card, which should feature a lower interest rate than what you're paying on your existing debt now. The credit card type you select doesn’t matter. You can utilize a balance transfer credit card, a low interest credit card, or a rewards credit card. If the card offers a lower interest rate than what you're currently paying and allows balance transfers, they all perform the same credit card balance transfer task. Before applying for a low-interest credit card for the purpose of transferring any type of balance, it’s important to conduct some due diligence. These are critical things to consider if you want to maximize your savings through a credit card balance transfer.
1: Determine if a Credit Card Balance Transfer Is Right For You
Although credit card balance transfers are a popular way to reduce monthly interest costs, not everyone is perfectly positioned for this option. For instance, if the new account’s limit doesn’t allow you to pay off the other card’s entire balance, you might be stuck paying two monthly bills. That might worsen your financial situation.
If your spending habits have you living beyond your means, a credit card balance transfer will likely only prolong a financial reckoning. You need to run the numbers, stick to a realistic monthly budget, and be sure this debt-reduction solution will work for you. If you're unsure if a credit card balance transfer is the right solution for your needs, contact Peach State today. Our team can help you decide on the best debt reduction strategy.
2: Research Credit Card Options
The different credit card options and claims large companies make can be nothing short of dizzying. While there is an abundance of credit card options, be sure to check with your local credit union. As not-for-profit financial cooperative, credit unions typically offer credit cards with lower interest rates, no annual fees, and feature fee-free balance transfers. In fact, some provide zero-percent introductory offers that are perfect to complete a credit card balance transfer and pay off existing debt.
3: Request a Balance Transfer
The credit card balance transfer process is relatively straightforward. The best way to request a credit card transfer is by contacting the new credit card provider or your local credit union in which you would like to move your current credit card balance to. Keep in mind that you'll be opening a new credit card and will need to complete a credit card application. You will need to provide your personal information, and account numbers, among other things to complete the application.
In some cases, credit card companies may allow you to complete a balance transfer online through their digital platform, by check or via online banking. It may be easier to schedule an appointment and have a local lending professional help you organize the transfer.
4: Wait for the Balance Transfer to be Completed
Credit card balance transfers can take up to thirty days to complete. During that period, it’s conceivable that you will be required to make another monthly payment. It’s crucial to follow through and make that last higher-interest installment. Failing to make the payment could result in penalties and problems.
And if you didn’t complete your due diligence regarding balance transfer fees, some financial institutions may charge anywhere from 3-5 percent. That means you just increased your indebtedness and are heading in the wrong direction. If you selected a credit card that offers fee-free balance transfers and offers a zero-percent introductory rate, you're well on your way to eliminating that balance.
5: Pay Off Your Existing Credit Card Balance
Once your balance arrives in the new credit card account, you can start paying off your debt. Utilize a credit card payoff calculator to determine how long it will take for you to become debt-free and see what additional payments could be made in order to pay off your debt earlier.
Knowing how to transfer credit card balance amounts is only half of the solution. It’s up to you to craft a budget and financial plan that eliminates this new balance in a timely fashion and deters you from backsliding into debt.
Peach State Can Help With Your Credit Card Balance Transfer
If you're struggling with high-interest debt, the team at Peach State can help you transfer your balance to a lower-interest credit card.
Whether you're looking for a low-interest credit card, rewards credit card, or student credit card, all our cards feature no penalty APR, no annual fee, fee-free balance transfers, and so more. Apply online for your Peach State credit card today!
Now that you've learned how to transfer a credit card balance, the next step is finding the perfect credit card. Review our "The Best Credit Cards Always Offer These Hidden Benefits" complete guide to help you find the card that fits your lifestyle!