With responsible use, you could save money using a low rate balance transfer to help you pay down your credit card balances.
Save on your monthly payment
With Balance Transfers, there are a multitude of benefits. Balance Transfers give you the opportunity to lower your monthly payment. If you find yourself paying an enormous amount on your monthly expenses for your credit card debt, it may be time to consider moving your balances to one card and consolidating your debt. This transfer could help you save money over time.
The transfer has to make sense (cents)
There is a strategy to be able to transfer these balances to a new card. Most credit card financial institutions should offer a balance transfer promotion for new account holders. This is a benefit to you because you are establishing a relationship with a new Bank. You can also lower your monthly minimum payments! Score!
However, it is important to note that the transfer has to be managed properly. This means that you must understand the terms in order to make an informed decision. Most banks will charge some type of balance transfer fee, it’s inevitable. But it’s OK if the interest you are paying over time will save you money.
Example: if you are paying over 20% in interest on a few cards with a balance totaling $1,000 with a minimum payment of $92, you would pay interest totaling $111. However, if you transfer your balance to a 0% APR card, assuming a 4% balance transfer fee, you could pay $86 and save substantially in interest.
Transfer more than just credit card balances
Consider moving other balances as well. If you have a personal loan with a high interest rate and high monthly payment, you could also see savings by moving these balances. It works for any account that you have in which you want to consolidate into one monthly payment.
Take a look at your budget. See where you are spending the most money. Then consider where you could afford to consolidate your bills into one payment. But remember; make your payment on time every month. This will avoid your balance moving to the normal interest rate.