Tag: Balance Transfer

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Balance Transfer, Best of

Credit Scores That Get Balance Transfer Credit Cards

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

If you’re someone who struggles with credit card debt and high interest rates, a balance transfer might be a way to dig yourself out of indebtedness. There are various balance transfer credit cards that offer long 0% intro APR periods that provide you with ample time to pay off your balance. Depending on your credit score, you may qualify for some of the cards we list below.

Keep in mind that the credit score ranges listed below don’t guarantee that you will be approved for a card simply because you fall within the given credit range. Lenders consider numerous factors when determining eligibility.

Excellent credit

Chase Slate<sup>®</sup>

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Chase Slate®

Intro BT APR
0%

Introductory rate

Balance Transfer Fee
$0 intro balance transfer fee when you transfer a balance during the first 60 days your account is open. After 5% of the amount transferred, with a minimum of $5.
APR
15.99%-24.74%

Variable

Duration
15 months
Credit required
fair-credit

Average

BankAmericard® Credit Card

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on Bank Of America’s secure website

BankAmericard® Credit Card

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$0 Intro balance transfer fee for the first 60 days your account is open. After that, 3% (min. $10)
APR
12.99%-22.99%

Variable

Duration
15 months
Credit required
good-credit

Excellent/Good

Discover it® - 18 Month Balance Transfer Offer

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on Discover Bank’s secure website

Rates & Fees

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Discover it® - 18 Month Balance Transfer Offer

Intro BT APR
0%

promotional rate

Balance Transfer Fee
3%
APR
11.99%-23.99%

Variable

Duration
18 months
Credit required
good-credit

Excellent/Good

Good / Excellent

Citi Simplicity® Card - No Late Fees Ever

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on Citibank’s secure website

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Citi Simplicity® Card - No Late Fees Ever

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
14.99%-24.99%

Variable

Duration
21 months
Credit required
good-credit

Excellent/Good

Citi® Double Cash Card – 18 month BT offer

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on Citibank’s secure website

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Citi® Double Cash Card – 18 month BT offer

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
14.49%-24.49%

Variable

Duration
18 months
Credit required
good-credit

Excellent/Good

Citi® Diamond Preferred® Card

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on Citibank’s secure website

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Citi® Diamond Preferred® Card

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
13.99%-23.99%

Variable

Duration
21 months
Credit required
good-credit

Excellent/Good

Sphere® Credit Card from Santander

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on Santander’s secure website

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Sphere® Credit Card from Santander

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$10 or 4% of the amount of the transfer, whichever is greater
APR
13.49%-23.49%

Variable

Duration
24 months
Credit required
fair-credit

Average

Wells Fargo Platinum Visa® Card

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on Wells Fargo Bank’s secure website

Wells Fargo Platinum Visa® Card

Intro BT APR
0%

promotional rate

Balance Transfer Fee
3% Intro for 18 months, then 5%
APR
16.15%-25.99%

Variable

Duration
18 months
Credit required
good-credit

Excellent/Good

Good credit

Chase Slate<sup>®</sup>

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on Chase’s secure website

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Chase Slate®

Intro BT APR
0%

Introductory rate

Balance Transfer Fee
$0 intro balance transfer fee when you transfer a balance during the first 60 days your account is open. After 5% of the amount transferred, with a minimum of $5.
APR
15.99%-24.74%

Variable

Duration
15 months
Credit required
fair-credit

Average

BankAmericard® Credit Card

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on Bank Of America’s secure website

BankAmericard® Credit Card

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$0 Intro balance transfer fee for the first 60 days your account is open. After that, 3% (min. $10)
APR
12.99%-22.99%

Variable

Duration
15 months
Credit required
good-credit

Excellent/Good

Discover it® - 18 Month Balance Transfer Offer

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on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® - 18 Month Balance Transfer Offer

Intro BT APR
0%

promotional rate

Balance Transfer Fee
3%
APR
11.99%-23.99%

Variable

Duration
18 months
Credit required
good-credit

Excellent/Good

Good / Excellent

Citi Simplicity® Card - No Late Fees Ever

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on Citibank’s secure website

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Citi Simplicity® Card - No Late Fees Ever

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
14.99%-24.99%

Variable

Duration
21 months
Credit required
good-credit

Excellent/Good

Citi® Double Cash Card – 18 month BT offer

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on Citibank’s secure website

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Citi® Double Cash Card – 18 month BT offer

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
14.49%-24.49%

Variable

Duration
18 months
Credit required
good-credit

Excellent/Good

Chase Freedom<sup>®</sup>

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on Chase’s secure website

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Chase Freedom®

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 5% of the amount of the transfer, whichever is greater
APR
15.99%-24.74%

Variable

Duration
15 months
Credit required
good-credit

Excellent/Good

Fair credit

We recommend using LendingTree, MagnifyMoney’s parent company, to shop for the best personal loan. With a single online form, you can see results from dozens of lenders and shop around for the best deal. By using LendingTree to look for a personal loan, a soft credit pull is performed, which means your credit score will not be negatively impacted. Here are options for fair credit:

MasterCard Platinum from Aspire FCU

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on Aspire Credit Union’s secure website

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MasterCard Platinum from Aspire FCU

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 2% of the amount of the transfer, whichever is greater
APR
9.15%-18.00%

Variable

Duration
6 months
Credit required
fair-credit

Average

LEARN MORE Secured

on LendingTree’s secure website

LendingTree

Loan Amount
up to $35,000
Term
up to 60 Months
APR Range
5.99%-35.99%
Origination Fee
Varies
Credit Required
Bad or Could be Better/Average/Good/Excellent
Soft Pull
You can get your rate without hurting your score.

Bad credit

*The credit score ranges listed above are for FICO Scores and obtained from Experian.

FAQ

The amount of time your have to complete your transfer will vary by credit card. Many cards require you to complete your transfer between 30 to 60 days from account opening, but check your specific card agreement for specifics. A good rule of thumb is to complete your transfer as soon as possible; the 0% intro APR period often starts from the day your account is opened.

Many cards charge a balance transfer fee ranging from 3 to 5 percent of the amount you transfer. So if you transfer $1,000 to a card with a 3 percent fee, you will accrue a $30 fee and owe $1,030. But be advised: There are cards that have $0 intro transfer fees.

Any remaining balances will accrue interest. The rate depends on your card agreement.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Pay Down My Debt

How to Choose the Right Type Of Debt Consolidation

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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If you’re feeling buried by what you owe, debt consolidation could provide you with both immediate relief and a quicker path to debt-free.

Debt consolidation is the process of taking out a new loan and using that money to pay off your existing debt. It can help in a number of ways:

  • A lower interest rate could save you money and allow you to pay your debt off sooner
  • A longer repayment period could reduce your monthly payment
  • A single loan and single payment could be easier to manage than multiple loans

But debt consolidation isn’t without its potential pitfalls. First and foremost: Consolidating your debt doesn’t address the behavior that got you into trouble in the first place. If you’re in debt because of overspending, consolidating may actually exacerbate your problems by opening up new lines of credit that you can use to spend even more.

And every debt consolidation option has its own set of pros and cons that can make it a good fit or a bad one, depending on your circumstances.

This post explains all of those pros and cons. It should help you decide if debt consolidation is the right move for you, and, if so, which option is best.

Six Consolidation Options to Choose From

1. Credit card balance transfers

A credit card balance transfer is often the cheapest debt consolidation option, especially if you have excellent credit.

With this kind of transfer, you open a new credit card and transfer the balance on your existing card(s) to it. There is occasionally a small fee for the transfer, but if you have excellent credit, you can often complete the transfer for free and take advantage of 0 percent interest offers for anywhere from 12-21 months. None of the other debt consolidation options can match that interest rate.

There are some downsides, though:

  • You need a credit score of 700 or above to qualify for the best interest rate promotional periods.
  • Many cards charge fees of 3 to 5 percent on the amount that you transfer, which can eat into your savings.
  • Unless you cancel your old cards, you’re opening up additional borrowing capacity that can lead to even more credit card debt. Let’s put that another way: Now that you’ve paid off your old cards, you might be tempted to start using them again. (Don’t!)
  • If you don’t pay the loan back completely during the promotional period, your interest rate can subsequently soar. Some balance transfer cards also charge deferred interest, which can further increase the cost if you don’t pay your debt off in time.
  • This just isn’t for people with high levels of debt. Credit limits are relatively low compared with those tied to other debt consolidation options.

Given all of that, a credit card balance transfer is best for someone with excellent credit, relatively small amounts of debt and strong budgeting habits that will prevent them from adding to their burden by getting even further into debt.

2. Home equity/HELOCs

Home equity loans and home equity lines of credit (HELOCs) allow you to tap into the equity you’ve built in your home for any number of reasons, including to pay off some or all of your other debt.

The biggest benefit of this approach is that interest rates are still near all-time lows, giving you the opportunity to significantly reduce the cost of your debt. You may even be able to deduct your interest payments for tax purposes.

But again, there are perils. Here are some of the downsides to using a HELOC/home equity loan for debt consolidation:

  • Upfront processing fees. You need to watch out for upfront costs, which can eat into or even completely negate the impact of lowering your interest rate. You can run the numbers yourself here.
  • Long loan terms. You also need to be careful about extending your loan term. You might be able to reduce your monthly payment that way, but if you extend it too far, you could end up paying more interest overall. Home equity loans typically have terms of five to 15 years, while home equity lines of credit typically have 10-to-20-year repayment periods.
  • You could lose your home. Finally, you need to understand that these loans are secured by your home. Fail to make timely payments, and you put that home in jeopardy. This is why, though the interest rates are lower than with most other debt consolidation options, there’s also added risk.

Home equity loans and HELOCs are generally best for people who have built up significant equity in their home, can get a loan with minimal upfront costs, and either don’t have excellent credit or need to consolidate more debt than is possible with a simple balance transfer.

You can ask your current mortgage provider about taking out a home equity loan or line of credit. Also, compare offers at MagnifyMoney’s parent company, LendingTree, here and here.

3. Personal loans

Personal loans are unsecured loans, typically with terms of two to seven years. Interest rates typically range from 5 to 36 percent, depending on your credit score and the amount you borrow.

The advantage of a personal loan over a credit card balance transfer is that it’s easier to qualify. While you typically need a credit score of 700 for a balance transfer, you can get a personal loan with a credit score as low as 580. You can also qualify for larger loan amounts than the typical balance transfer.

And the big advantage over a home equity loan or line of credit is that the loan is not secured by your house. This means you can’t lose your home if you have trouble paying back the debt. You can also apply for and obtain a personal loan very quickly, often at a lower cost than a home equity loan or line of credit.

The biggest disadvantage is that your interest rate will likely be higher than either of those options. And if your credit score is low, you may not find a better interest rate than what you already have.

Generally, a personal loan is best for someone with a credit score between 600 and 700 who either doesn’t have home equity or doesn’t want to borrow against his or her home.

You can shop around for a personal loan at LendingTree here. It’s important to compare offers to get the best deal possible.

4. Banks and credit unions

In addition to shopping for a personal loan online, you can contact your local banks or credit unions to see what types of loan options offer.

This is more time-consuming than applying online, and it can be harder to compare a variety of loan options. But it may lead to a better interest rate, especially if you already have a good relationship with a local bank.

One strategy you might try: Get quotes online using a service like LendingTree’s, then take those quotes to the bank or credit union and give it a chance to do better.

This strategy is best for anyone who already has a good and lengthy banking relationship, particularly with a credit union. But if you’re going the personal-loan route, it’s worth looking into in any case.

You can find credit unions in your area here.

5. Borrowing from family or friends

If you’re lucky enough to have family members or friends who have ample assets and are happy to help, this could be the easiest and cheapest debt consolidation option.

With no credit check, no upfront fees and relatively lenient interest rate policies, this might seem like the best of all worlds.

Even so, there are some things to watch out for.

First: A loan fundamentally changes your relationship with the person from whom you borrow. No matter what terms you’re on now or how much you love and trust this person, borrowing money introduces the potential for the relationship to sour in a hurry.

Consequently, if you do want to go this route, you need to do it the right way.

Eric Rosenberg, the chief executive of Money Mola, an app that lets friends and family track loans and calculate interest, suggests creating a contract that outlines each party’s responsibilities, how much money will be borrowed, the timeline for repayment, the payment frequency and the interest rate. He also suggests using a spreadsheet to keep track of the payments made and the balance due.

And Neal Frankle, a certified financial planner and the founder of Credit Pilgrim, suggests adhering to the current guidelines for Applicable Federal Rate (AFR), which as of this writing require a minimum interest of 1.27 to 2.5 percent, depending on the length of the loan. Otherwise, you may have to explain yourself to the IRS and the person lending you the money could be charged imputed interest and have to pay additional taxes.

If you have a family member or a friend who is both willing and able to lend you money, and if your credit isn’t strong enough to qualify favorably for one of the other options above, this could be a quick and inexpensive way to consolidate your debt.

6. Retirement accounts

Employer retirement plans like 401(k)s and 403(b)s often have provisions that allow you to borrow from the accumulated sums, with repayment of the loan going right back into your account.

And while you can’t borrow from an IRA, you can withdraw up to the amount you’ve contributed to a Roth IRA at any time without penalties or taxes, and you can withdraw money from a traditional IRA early if you’re willing to pay both taxes and a 10 percent penalty (with a few exceptions).

The biggest advantage of taking the money out of a retirement account is that there is no credit check. You can get the money quickly, no matter what your credit history looks like. And with a 401(k) or 403(b), you are also paying interest back to yourself rather than giving it to a lender.

Still, while there are situations in which borrowing from an employer plan can make sense, most financial experts agree that this should be considered a last-resort debt consolidation option.

One reason is simply this: Your current debt is already hindering your ability to save for the future, while taking money out of these accounts will only exacerbate the problem. Another is that tapping a retirement account now may increase the odds that it will happen again.

“I’d stay away from a 401(k) loan like the plague,” says Ryan McPherson. McPherson, based in Atlanta, Ga., is a certified financial planner and fee-only financial planner and the founder of Intelligent Worth. “With no underwriting process, and because you’re not securing it with your house, you’re more likely to do it again in the future.”

If you are in dire straits and cannot use any of the other strategies above, then borrowing or withdrawing from a retirement account may be the only consolidation option you have. Otherwise, you are likely to be better off going another route.

Things to consider before picking a debt consolidation strategy

With all these debt consolidation options at your disposal, how do you choose the right one for your situation? To be sure, it’s a key decision: The right option will make it easier for you to pay your obligations, and less likely that you’ll fall back into debt.

Here are the biggest variables you should consider before making the choice:

  1. Have you fixed the cause of the debt? Until you’ve addressed the root cause of your debt, how can any consolidation option help you get and stay out of debt?
  2. How much debt do you have? Smaller debts can be handled through any of these options. Larger debts might rule out balance transfers or borrowing from relatives or friends.
  3. What are your interest rates? You need to be able to compare your current interest rates with the interest rates you’re offered by the options above, if you want to know whether you’re getting a good deal.
  4. What is your credit score? Your score determines eligibility for various debt consolidation options, as well as the quality of the offers you’ll receive. You can check your credit score here.
  5. When do you want to be debt-free? Shorter repayment periods will cost less but require a higher monthly payment. Longer repayment periods will cost more but with a lower monthly payment. With this in mind, you need to decide both what you want and what you can afford.
  6. Do you have home equity? This determines whether a home equity loan or line of credit is an option. If it is, you should decide if you’re comfortable putting your home on the line.
  7. Do you have savings? Could you use some of your savings, outside of retirement accounts, to pay off some or all of your debt? That may allow you to avoid debt consolidation altogether and save yourself some money.

So … what’s the best consolidation strategy?

Unfortunately, there is no single answer to this tough question. The right answer for you depends the specifics of the situation.

Your job is to know what you currently owe and understand the pros and cons of each option we’ve outlined above. In this fashion, you can make an informed choice, one that’ll get you out of debt now and keep you out of it forever.

Matt Becker
Matt Becker |

Matt Becker is a writer at MagnifyMoney. You can email Matt at matt@magnifymoney.com

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Balance Transfer, Reviews

Review: Alliant Credit Union Visa Platinum Card Balance Transfer

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

If you have credit card debt, you are probably paying a high (double-digit) interest rate. One of the best ways to get out of debt faster is to use a 0% balance transfer offer. At MagnifyMoney, our favorite balance transfers have no balance transfer fee. Alliant Credit Union — a credit union that anyone can join — is offering a no-fee 0% balance transfer for 12 months. Although there are longer 0% balance transfers on the market, this is a solid no-fee option that can help you save money and become debt-free faster.

One added perk: Once you become a member of the credit union to take advantage of the balance transfer offer, you will also be able to take advantage of Alliant’s other competitive products. They offer a savings account that pays 1.05% APY. They offer 2.5% cash back on a new credit card. And their mortgage and auto loan rates are some of the lowest in the country. Alliant, one of our favorite credit unions in the country, provides the value you expect from a credit union with the user interface and digital tools that you would expect from a bank.

Visa® Platinum Card from Alliant CU

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on Alliant Credit Union’s secure website

Visa® Platinum Card from Alliant CU

Intro BT APR
0%

promotional rate

Balance Transfer Fee
0%
APR
10.24%-22.24%

Variable

Duration
12 months
Credit required
fair-credit

Average

How the Card Works

The Alliant Visa Platinum Card is a very simple, straightforward credit card. There is no annual fee, and there are no rewards. You will probably be given a 0% intro APR on purchases and balance transfers for the first 12 months that you have the card (more on that later). Even better — there is no fee for the balance transfer. After 12 months, the APR will range from 10.24% to 22.24%, depending upon your credit score.

Unfortunately, there is one part of this card that is a little complicated — and could lead to disappointment. You are not guaranteed the 0% interest rate for the 12 months. Depending upon your credit score, the interest rate during the 12-month promotional period could be as high as 5.99%. While a 5.99% rate (especially for someone with a less than perfect credit score) could be a good deal — it is certainly not the 0% intro APR being advertised.

In order to get the credit card, you will need to become a member of the credit union. There are a number of ways that you can become a member. Some of the ways are free (for example, you live in a community in Illinois that is covered). But for most people, the easiest way to join is to make a $10 donation to Foster Care to Success. This is an organization that serves foster teens across the U.S. that are “ageing out” of the system. Once you make that contribution, you will be eligible to join the credit union and get the credit card (along with other credit union products). The application process is easy — you just need to select “not a member” at the beginning of the process, and it will walk you through the membership process as part of your credit card application.

The credit card does offer some standard credit card perks, like $0 fraud liability and rental car insurance. However, the real value is the low interest rate that can help you become debt-free fast.

If you want to earn rewards, Alliant does offer another card — the Visa Platinum Rewards Card. This card has the same balance transfer offer (0% for 12 months with no balance transfer fee). But with this card, you also earn rewards. You can earn 2 points for every $1 spent on the card. However, the APRs (after the balance transfer period) will be higher. In general, we advise people to separate their spending from their borrowing. Cards that offer no rewards tend to have lower interest rates, and cards with rewards have higher interest rates — as we see in this case. If you are looking to become debt-free, it is probably better to ignore rewards and get the lowest interest rate possible.

How to Qualify for the Card

Alliant targets people with good or excellent credit. In general, that means you have a decent chance of being approved if your score is in the mid-600s, but you have a much better chance of being approved if your score is above 700.

In addition, Alliant (like all lenders) will need to be comfortable that you will be able to afford your payments. That means you will need to have a steady source of income. In addition, the lender will likely look at your total debt in relation to your income. If you have too much debt, you will find it more difficult to get approved.

What We Like About the Card

No fee for the balance transfer.

There is nothing better than free. And with no balance transfer fee and no interest for 12 months, that is exactly what you get. Pay down as much of the debt as possible during the promotional period — because every dollar of every payment will go toward principal.

It is from a credit union.

At MagnifyMoney, we like credit unions — in theory. As member-owned organizations, credit unions do not need to worry about shareholders and should be able to offer better value and lower interest rates. Unfortunately, far too many credit unions have websites that look like they were designed in the 1990s. With Alliant, we finally have a credit union that has made the application process easy, and has a great website. Alliant is delivering on the true potential of a credit union.

What We Don’t Like About the Card

It is not the longest balance transfer.

There are a number of longer no-fee balance transfer options on the market. You can get a no-fee balance transfer for as long as 15 months from some of the leading banks in the country.

You are not guaranteed a 0% intro offer — the rate could be higher.

In the fine print, Alliant makes it clear that you might not get a 0% intro rate. The intro rate could be as high as 5.99%, depending upon your credit score. The only silver lining: Alliant is willing to give intro rates to people with less than perfect credit. But we still find it a bit annoying that you could apply for a 0% intro rate and end up with a 5.99% rate instead.

Joining the credit union costs money.

If you can’t find a free way to join the credit union, you will have to make a $10 donation. We certainly like the cause that you would be supporting. However, it is still additional money that you would need to spend in order to get access to the product.

How to Complete a Balance Transfer

Completing the balance transfer is easy. During the application process, you can provide the credit card number of your existing credit cards (where the debt is located now). Alliant will then make a payment to your existing credit card companies.

Alternatively, you can call Alliant once you have the card to complete the balance transfer on the phone.

Just remember these tips:

  • If you start the balance transfer close to the payment date, you might want to make the minimum payment to ensure you don’t get hit with any late charges. Although balance transfers usually process quickly — they can take a couple of weeks. And you would not want to get stuck with a late fee.
  • Get the transfer done as quickly as possible. The 0% is for 12 months from when you open the account — not from when you transfer the debt. The faster your transfer the debt, the more money you can save.

Who Benefits Most from the Card

If you have credit card debt that you think you can pay off in a year, this is a great option. With no balance transfer fee and 0% interest for one year — you can pay down your debt quickly. If you think it will take longer to pay off your debt, you might want to consider a longer balance transfer from a more traditional bank.

FAQs

Yes, anyone can join. During the application process, you will be asked if you are already a member of the credit union. Just select “not a member” and you can join during the application process.

Once the introductory period is over, interest will start to accrue at the standard purchase interest rate on a go-forward basis. Interest during the introductory period is waived — so you do not need to worry about a retroactive interest charge.

In the short term, your credit score will probably take a small hit (5-10 points) because you applied for new credit. However, over time, a balance transfer can increase your credit score with proper practices. This is because while new credit makes up 10% of your credit score, the amount you owe accounts for 30%. By using a balance transfer, you will reduce your interest rate. That should help you get out of debt a lot faster.

Liz Stapleton
Liz Stapleton |

Liz Stapleton is a writer at MagnifyMoney. You can email Liz here

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Balance Transfer, Reviews

Citi Simplicity Review: Now 0% Balance Transfer for 21 Months

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citi Simplicity® Card – No Late Fees Ever card has one of the longest 0% intro balance transfer offers on the market. If you transfer credit card debt to Citi Simplicity® Card – No Late Fees Ever, you will get a 0% intro APR for an incredible 21 months. There is a 3% balance transfer fee. You should do the math (and we will help you later in this post) — but for most people the fee is worth paying. As the name implies, Citi has tried to make this card “simple.” That means no late fees, no annual fee, and no penalty APR. It also means no rewards. If you have credit card debt at a high interest rate, Citi Simplicity® Card – No Late Fees Ever can help you save a lot of money and become debt-free faster if you use it wisely.

Citi Simplicity® Card - No Late Fees Ever

APPLY NOW Secured

on Citibank’s secure website

Citi Simplicity® Card - No Late Fees Ever

Intro BT APR
0%

promotional rate

Balance Transfer Fee
$5 or 3% of the amount of the transfer, whichever is greater
APR
14.99%-24.99%

Variable

Duration
21 months
Credit required
good-credit

Excellent/Good

How the Card Works

The card gets its name, Citi Simplicity® Card – No Late Fees Ever, from its effort to keep things simple. There is never an annual fee, late fee, or penalty rate. There is an introductory offer of 0% for 21 months which includes balance transfers made within the first four months of opening the card and all purchases made during the 21-month period. After 21 months your rate will depend on your creditworthiness. Additionally, after the introductory rate ends, you will see the same interest rate for purchases, balance transfers, and cash advances.

The Introductory Offer

This is the longest introductory 0% purchase offer that we have found on the market. If you need to finance a purchase, it will be hard to find a better deal. What we particularly like about this 0% intro APR is that the interest is waived, not deferred. Most store credit cards only defer the interest (and for far fewer than 21 months), and you would be hit with a big penalty if you don’t pay the balance in full before the promotional period is over. That is not the case with Citi Simplicity® Card – No Late Fees Ever.

In addition to the 0% intro purchase offer, there is also a very strong 0% intro balance transfer offer. You will pay no interest for 21 months, but will need to pay a 3% balance transfer. If you think you can pay your debt in full within 6 months, a balance transfer is usually not worthwhile. However, if you think it will take longer than 6 months, the fee is usually worth it and you can use this calculator to see how much you can save.

Here is an example to help understand the math. If you are making a monthly payment of $300 on $10,000 of credit card debt at a current interest rate of 17% and you transfer it to the Citi Simplicity® Card – No Late Fees Ever card, you will be charged a $300 upfront fee. However, during the 21-month promotional period you would save over $2,000 — making the $300 fee worthwhile.

What Happens After 21 Months

Even if you still have a balance at the end of the 21 months, interest will start to accrue on your remaining balance on a go-forward basis. There is no penalty, and no retroactive interest will be applied.

No Late Fee

Most credit cards charge a late fee of around $30 when you miss paying at least the minimum payment by the deadline. However, the Citi Simplicity® Card – No Late Fees Ever does away with this fee and will let you choose your payment due date when you sign up.

However, just because Citi doesn’t charge a late fee doesn’t mean there aren’t consequences for making a late payment. If your payment is more than 30 days late, Citi would report that information to the credit bureau. This can have a negative impact on your credit score that can result in higher interest rates when you later apply for new lines of credit.

No Penalty Rate

Most credit cards in addition to charging a late fee will penalize you with an increased interest rate when you are late with a payment. This rate could be somewhere in the 30% range for purchases moving forward. The Citi Simplicity® Card – No Late Fees Ever card promises no penalty rate, meaning even if you are late with a payment, after all mistakes happen, you won’t be gouged with your credit card interest rate. However, if you bounce a check for payment, then you can be charged up to $35.

Same Interest Rate No Matter What You Use Your Card For

The Citi Simplicity® Card – No Late Fees Ever card, keeping things simple, makes the interest rate for purchases, balance transfers, and cash advances all the same. Many other credit cards will have different interest rates for each.

Price Protection

It’s already been mentioned that the Citi Simplicity® Card – No Late Fees Ever card does not offer any rewards programs. However, they do offer some price protection. It’s called Citi® Price Rewind. After you make a purchase with your card, you can register that purchase with Citi. Then Citi will search for lower prices across hundreds of online retailers. If Citi finds it at a lower price within 60 days, you will receive the difference between what you paid and the lower price found, up to $500 per purchase and $2,500 per year.

The only downside is this benefit only applies to certain purchases. For example, it doesn’t apply to purchasing a car, but can apply for tires purchased. You can view the full list of what qualifies here. If you find a lower price yourself, then you can submit a Price Rewind Benefit Request.

How to Qualify for the Card

You need to have good or excellent credit in order to be approved for the credit card.

In addition to a strong credit score, you will also need to demonstrate your ability to repay the debt. Citi will look at your total debt relative to your income to ensure that you are not too deep into debt. This product is not a way for people in trouble to get a lower rate — it is a way for Citi to get borrowers with a good profile who want a lower interest rate.

What We Like About the Card

A very long 0% intro period.

At a 3% balance transfer fee, this is the longest balance transfer on the market. Time is money — and every additional month at 0% can represent considerable savings.

Fewer “gotcha” fees.

Although we hope you never need to take advantage of these benefits, the card has no late fees and no penalty APR. In order to avoid even the risk of a late fee, we strongly recommend that you automate your monthly payments. However, mistakes can happen — and we do applaud Citi for removing some of the most annoying fees.

Citi ®Price Rewind — it is actually a nice feature.

Citi® Price Rewind is a feature that is not used enough. Citi will look for a better deal — and give you the difference if you overpaid. This isn’t just a promise — we have spoken with people who have benefited from this feature.

What We Don’t Like About the Card

There is a balance transfer fee.

In most cases, and for most people, the fee will more than pay for itself. However, there are other balance transfer deals on the market that don’t have a fee. Just make sure you do the math to ensure that the fee is worth paying in your situation.

The rate after the 0% intro offer is not low.

After the intro period is over, the go-to purchase APR is not low. It ranges from the teens to the 20s, depending upon your credit risk. Hopefully, the 21-month period is long enough to eliminate your debt completely.

How to Complete a Balance Transfer

After receiving your card, you should call the number on the back of your card to initiate the balance transfer. You will need to give the credit card number of the credit card that has the debt. You cannot transfer debt from another Citi credit card (including its co-brand cards).

Although it can take less time, Citi warns that a balance transfer takes at least 14 days to complete. And you will remain responsible for making all payments on your card until the transfer is complete. We recommend paying close attention so that you do not end up with any late fees on your existing cards.

Who Benefits Most from the Card

If you have a lot of credit card debt that will take a long time (more than 15 months) to pay off, this card is a great option. Over 21 months, the savings can be incredible. Just make sure you take advantage of the 0% intro period to attack your debt as quickly as possible.

FAQs

No — you do not need excellent credit. Citi may approve anyone with good or excellent credit.

Once the introductory period is over, interest will start to accrue at the standard purchase interest rate on a go-forward basis. Interest during the introductory period is waived — so you do not need to worry about a retroactive interest charge.

In the short term, your credit score will probably take a small hit (5-10 points) because you applied for new credit. However, over time, a balance transfer can increase your credit score with proper practices. This is because while new credit makes up 10% of your credit score, the amount you owe accounts for 30%. By using a balance transfer, you will reduce your interest rate. That should help you get out of debt a lot faster.

Liz Stapleton
Liz Stapleton |

Liz Stapleton is a writer at MagnifyMoney. You can email Liz here

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Student Loan ReFi

Should You Refinance Your Student Loans with a Credit Card?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Using a balance transfer credit card can be a great way to lower the interest rates on your debt to help you save money and pay your debt off faster. Most people only think about doing a balance transfer with high-interest credit card debt, but recently I’ve been considering a 0% interest balance transfer credit card to help me pay off my student loan.

After making my final credit card payment to be credit card debt free, I started thinking about how I could use a balance transfer offer extended by my creditor to help pay off other types of debt I still have. Since the highest interest debt I have remaining is my student loan, this is what I’m considering refinancing with a 0% interest balance transfer. My student loan only has a remaining balance of about $6,000, which means I could transfer the entire balance to the credit card and pay it off before the promotional rate expires, if I pay it off aggressively.

Of course, there are lots of reasons why you could choose to refinance or consolidate your student loans. I was curious whether or not a balance transfer could be a viable option as well.

Here are some of the pros and cons you should consider before deciding to refinance your student loans with a balance transfer credit card.

Benefits of Refinancing Student Loans with a Balance Transfer Credit Card

There are several benefits you could take advantage of by refinancing your student loans with a balance transfer credit card.

A Lower Interest Rate

One of the main reasons people choose to refinance student loans is to lock in a lower interest rate. For example, my student loans are at 6.8%. If I do a balance transfer to a 0% interest credit card, I could save hundreds of dollars on interest through the end of the 0% interest rate period on the balance transfer.

But keep in mind that not all balance transfers are created equal. You might get all kinds of different balance transfer offers from companies trying to entice you to sign up for a new credit card, or even transfer a balance to a card you already have. Some of these transfer offers will be better than others. You might encounter offers that have a 1% to 3% interest rate for a certain period of time, usually 12, 18, or 24 months. But the best balance transfer offers have a 0% interest rate, obviously saving you more on interest than the others.

Pay Off Student Loans Faster

Transferring student loan debt to a credit card can save money, but only as long as you get the balance transfer paid off before the promotional interest rate expires. This time limit is a big motivation for people to pay extra on their student loans to make sure the balance transfer is paid off before it expires. If you struggle with being motivated to make extra payments, the reality that your interest rate may spike up to 15% or more after a few months may be just the motivation you need to get serious about paying off debt. It’s worked well for me in the past when I’ve transferred high-interest credit card debt to a 0% balance transfer credit card, helping me to pay off $5,284.18 much faster than I would have otherwise.

Drawbacks of Refinancing Student Loans with a Balance Transfer Credit Card

Although using a balance transfer to help pay off your student loans sounds like a great way to save money and pay your debt off faster, there are some potential downsides you should be aware of.

Balance Transfer Fees

A lower interest rate makes balance transfer credit cards an attractive option for those looking to refinance debt, but you need to consider more than just the interest rate before deciding to refinance your student loans with a balance transfer credit card. Make sure you consider the balance transfer fee that many credit cards charge. This can eat away at the amount of money you save on interest. Luckily, some credit cards do have a cap on this fee at $50 or $75, which can be helpful if you plan to transfer a large balance that would otherwise result in a fee higher than that cap. But at that point, it could be difficult to get your student loan transfer paid off before the promotional interest rate on the balance transfer expires.

There are balance transfers without fees, but your options may be limited. If you find a no-fee, 0% interest transfer option you qualify for, it’s almost a no-brainer to use it to pay off other debt.

Potential Loss of Savings on Interest

As mentioned, it’s imperative that you pay off your entire balance transfer before the promotional interest rate expires in 12, 18, or 24 months. If you don’t, the high interest rate after the transfer expires will quickly negate any interest savings you earned by doing the transfer in the first place. In fact, you may end up paying more in interest than if you’d skipped the balance transfer in the first place.

You May Not Qualify

In order to use a balance transfer credit card to refinance your student loans, you first have to qualify for one. In order to qualify for many balance transfer credit cards you must have a credit score of at least 680.

Applying Could Ding Your Credit Score

If you don’t already have a credit card with a balance transfer offer available, you may need to apply for a new card. Anytime you apply for a new line of credit, it will ding your credit score slightly. This may or may not be an important factor depending on what your score is and if you plan to apply for any other credit cards or loans in the near future.

Loss of Federal Student Borrower Protections

A final and very important consideration to think about before you decide to refinance your student loans with a balance transfer credit card is the loss of student loan protections you may have. If you are refinancing federal student loans, you will lose the protections that are offered to you as a borrower, such as:

  • Income-driven repayment plans
  • The opportunity for student loan forgiveness
  • Deferment or forbearance
  • Discharge upon permanent disability or death

Some credit card companies may be willing to work with you in an emergency situation, but chances are high that even in those situations the flexibility offered to federal student loan borrowers is far greater. In some cases, you may be better off not refinancing your student loans in order to maintain your borrower protections.

With most low or 0% interest balance transfer credit cards, you can’t miss a payment or pay late. If you do, your promotional interest rate may be void and you will be subject to the regular interest rate, which could be 15% or more depending on the card and your credit score.

Despite these drawbacks, doing a balance transfer to help pay off your student loans can be a good idea if your goal is to get out of debt quickly while saving money on interest.

Kayla Sloan
Kayla Sloan |

Kayla Sloan is a writer at MagnifyMoney. You can email Kayla at Kayla@magnifymoney.com

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Balance Transfer

Discover It Balance Transfer Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Balance Transfer Review

Updated July 5, 2017

Credit card debt is a burden weighing down the budgets of many Americans. If you’re motivated to unlock the shackles of consumer debt, then a balance transfer may be right for you. But finding the right one can be overwhelming. ” Discover it® – 18 Month Balance Transfer Offer” is an excellent option for people with debt. You will have an introductory 0% APR on balance transfers for the first 18 months, with a 3% balance transfer fee.

Discover it® - 18 Month Balance Transfer Offer

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Rates & Fees

Key Credit Card Features

For people with credit card debt, the most important feature is the generous balance transfer offer. If you transfer debt from any other credit card company, you will pay a one-time fee of 3% of the amount transferred. But you will then pay no interest for 18 months. You could save hundreds of dollars (and potentially more) during the interest-free period. Just make sure you get your transfer completed as soon as the account is opened and that you make your monthly payments on time. 0% for 18 months is one of the best balance transfer credit cards on the market today.

In addition to charging no interest on balance transfers for 18 months, the card charges 0% interest on purchases during the first six months. You will be able to earn cash back on your purchases as well. However, we strongly recommend using a balance transfer credit cards only for balance transfers so that you can get out of debt faster.

Discover also offers your free FICO Credit Score on monthly statements and free Social Security Number monitoring. Checking your credit score will help you keep tabs on your credit. Discover will monitor your Social Security Number and alert you if they find your Social Security Number on any of thousands of risky websites. This is a great feature that will help alert you of possible fraud.

Do You Need a Balance Transfer?

Most people who are paying down credit card are subjected to interest rates north of 15%. Reducing interest rates on debt with a balance transfer can slash both the time and money it takes to pay it all down.

But let’s not get ahead of ourselves here, a balance transfer isn’t right for everyone.

[Find out how much you’ll pay in interest on credit card debt here.]

How Do You Qualify For a Balance Transfer?

Banks will only offer balance transfers to people with good or excellent credit. Typically, the ideal candidate will have:

  • A good or excellent credit score. Your score does not have to be perfect, but your chances are much better if you have a good score.
  • Your debt burden will be considered, and the lower the better. If you are having difficulties making monthly payments, a balance transfer is not for you.

Note: Your debt burden is calculated by adding up your monthly fixed expenses and dividing that by your monthly income. The expenses should include your monthly rent or mortgage payment, auto payment, student loan payments and the monthly payment on any other credit cards or loans that appear on your credit bureau. The higher that number, the more likely that lenders will not approve your application.

Also take into consideration why you’re in debt. Don’t get another credit card if you’re swipe happy and won’t be able to help but spend on the new credit card.

Is Discover It the Balance Transfer Right for You?

promo-balancetransfer-halfThe Discover it® – 18 Month Balance Transfer Offer is only right for you if your credit card debt is with another bank. You cannot do a balance transfer from one card to another within the same bank.

Discover it® – 18 Month Balance Transfer Offer currently offers an introductory 0% APR balance transfer for 18 months. There is a 3% balance transfer fee, but the fee often pays for itself — depending on your balance.

If you were approved for a balance transfer of $5,000, a 3% fee would equal $150. That shouldn’t sound like a lot, because leaving $5,000 at a 17% interest rate (with a payment of $250 a month), you’d pay the bank $153.16 of interest in just four months.

The Discover it® – 18 Month Balance Transfer Offer would save you $741, including interest and fees.

Should the Discover it® – 18 Month Balance Transfer Offer be Your First Balance Transfer Card?

While Discover it® – 18 Month Balance Transfer Offer does offer a competitive balance transfer, there are other options out there.

The Chase Slate® credit card has an excellent balance transfer offer. You can save with a $0 introductory balance transfer fee for transfers made during the first 60 days of account opening and get 0% introductory APR for 15 months on purchases and balance transfers, and a $0 annual fee. Plus, receive your Monthly FICO® Score and Credit Dashboard for free.

Chase Slate<sup>®</sup>

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The higher the debt, the more attractive Discover’s longer balance transfer offer becomes. But for smaller balances, the no fee Ring offer is a better deal.

Fine Print Alert: What to Watch Out For 

If you do complete a balance transfer with Discover, make sure that you:

  1. Complete your balance transfer as soon as possible. If you wait too long, you can lose the offer.
  2. Continue to pay on your old credit card until you see that the balance transfer has been completed. It can take two to three weeks for the balance transfer to complete, and you don’t want to be hit with late fees on your old credit card while waiting for the transfer.
  3. You can only move debt to Discover from another bank. You cannot transfer debt between two credit cards with Discover.
  4. Make your payments on time, every month. They charge a late fee of up to $37. Discover does state they waive your first late payment fee on the Discover it® – 18 Month Balance Transfer Offer card, but that isn’t a benefit you should plan on using.

How to Complete a Balance Transfer with Discover

We’ve created an entirely separate post featuring screenshots and explanations on how to complete a balance transfer with Discover. You can find it here.

If you run into road blocks or have any questions, don’t hesitate to reach out to us via email (info@magnifymoney.com) or on Twitter @Magnify_Money.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Balance Transfer, Pay Down My Debt

The Fastest Way to Pay Off $10,000 in Credit Card Debt

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Before you read on, click here to download our FREE guide to become debt free forever!

Screen Shot 2015-02-03 at 1.30.44 PM

Digging out of the debt hole can feel frustrating, intimidating and ultimately impossible. Fortunately, it doesn’t have to be any of those things if you learn how to take control.

Paying down debt is not only about finding the right financial tools, but also the right psychological ones. You need to understand why you got into debt in the first place. Perhaps it was a medical emergency or a home repair that needed to be taken care of immediately. Maybe you’d already drained your emergency fund on one piece of bad luck when misfortune struck again. Or maybe you’re struggling with a compulsive shopping problem, so paying down debt will likely result in you accumulating more until the addiction is addressed.

Understanding the why and how of your debt isn’t the only reason psychology plays a role in how you should create your debt attack plan.

You also need to understand what motivates you to succeed. Do you want to pay down your debt in the absolute fastest amount of time possible that will save more money or do you want to take some little wins along the way to keep yourself motivated?

The common terms for these debt repayment strategies are:

  • Debt avalanche: starting with the highest interest rate and working your way down, which saves both time and money.
  • Debt snowball: paying off small debts first to get the warm and fuzzies that will motivate you to keep going.

Whichever version you pick needs to set you up to be successful in your debt repayment strategy. Now it’s time to find the proper tools to help you dump that debt for good.

The first step in crafting a debt repayment strategy is to understand what you’re eligible to use. Your credit score will play a big role in whether or not you’ll qualify for products like balance transfers or competitive personal loan offers.

A credit score of less than 600 will make it difficult for you to qualify for a personal loan and will eliminate you from taking on a balance transfer offer.

If you have a credit score above 600, you have a good chance of qualifying for a personal loan at a much lower interest rate than your credit card debt. With new internet-only personal loan companies, you can shop for loans without hurting your score. Click here (you will be taken to the LendingTree site) to get rates from multiple lenders in just a few minutes, without a credit inquiry hurting your score. With a simple, single online form, you can get matched with multiple lenders. People with excellent credit can see APRs below 6%. But even if your credit isn’t perfect, you might be able to find a good loan because LendingTree partners with dozens of lenders. [Disclosure: LendingTree is the parent company of MagnifyMoney.]

If you have a score above 700, you could also qualify for 0% balance transfer offers.

[Click here if you’re looking to rebuild your credit score.]

Not sure what your credit score is? Click here to learn how to find out.

Now let’s talk about the financial tools to add into your debt repayment strategy in order to dig out of the hole.

Let’s say you have $10,000 in credit card debt, and are stuck paying 18% interest on it.

You already know that putting as much spare cash as you can toward paying down your debt is the most important thing to do. But once you’ve done that, so what’s next?

Use your good credit to make banks compete and cut your rates

MagnifyMoney’s Paying Down Debt Guide has easy to follow tips on how to put banks to work for you and get your rates cut.

You could save $1,800 a year in interest and lower your monthly payments based on several of the rates available today. That means you could pay it off almost 20% faster.

Here’s how it works.

Option One: Use a Balance Transfer (or Multiple Balance Transfers)

If you trust yourself to open a new credit card but not spend on it, consider a balance transfer. You may be able to cut your rate with a long 0% intro APR. You need to have a good credit score, and you might not get approved for the full amount that you want to transfer.

Your own bank might not give you a lower rate (or only drop it by a few percent), but there are lots of competing banks that may want to steal the business and give you a better rate.

Our favorite offer is the Chase Slate® credit card. There is a $0 intro balance transfer fee for transfers made within the first 60 days of account opening and 0% intro APR for 15 months on purchases and balance transfers. The card charges no annual fee.

Chase Slate<sup>®</sup>

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on Chase’s secure website

If you think it will take longer to pay off your debt, consider Discover it® - 18 Month Balance Transfer Offer, which offers an intro 0% APR for 18 months (with a 3% balance transfer fee).

MagnifyMoney regularly surveys the market to find the best balance transfer credit cards. If you would like to see what other options exist, beyond Chase and Discover, you can start there.

promo-balancetransfer-halfIt also has tips to make sure you do a balance transfer safely. If you follow them you’ll save thousands on your debt by remaining disciplined.

You might be scared of a balance transfer, but there is no faster way to cut your interest payments than taking advantage of the best 0% or low interest deals banks are offering.

Thanks to recent laws, balance transfers aren’t as sneaky as they used to be, and friendlier for helping you cut your debt.

Sometimes the first bank you deal with won’t give you a big enough credit line to handle all your credit card debt. Maybe you’ll get a $5,000 credit line for a 0% deal, but have $10,000 in debt. That’s okay. In that case, apply for the next best balance transfer deal you see. MagnifyMoney’s list of deals makes it easy to sort them.

Banks are okay with you shopping around for more than one deal.

Option Two: Personal Loan

If you never want to see another credit card again, you should consider a personal loan. You can get prequalified at multiple lenders without hurting your credit score, and find the best deal to pay off your debt faster.

Personal loan interest rates are often about 10-20%, but can sometimes be as low as 5-6% if you have very good credit.

Moving from 18% interest on a credit card to 10% on a personal loan is a good deal for you. You’ll also get one set monthly payment, and pay off the whole thing in 3 to 5 years.

Sometimes this may mean a higher monthly payment than you’re used to, but you’re better off putting your cash toward a higher payment with a lower rate.

And you’ll get out of debt months or years faster by leaving more money to pay down the debt itself. If you want to shop for a personal loan, we recommend starting at LendingTree. With a single online form, dozens of lenders will compete for your business. Only a soft credit pull is completed, so your credit score will not be harmed. People with excellent scores can see low APRs (sometimes below 6%). And people with less than perfect scores still have a good chance of finding a lender to approve them. (Note: MagnifyMoney is owned by LendingTree)

LendingTree

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If you don’t want to shop at LendingTree, you can see our list of the best personal loans here.

Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Balance Transfer

How to do a Balance Transfer with Bank of America

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Black woman using credit card and laptop

So, you have been approved for a balance transfer. Congratulations – there is no better way to save money and get out of debt faster. Just make sure you complete the transfer as soon as you receive your card in the mail and never more than 60 days after you apply, because you can lose the introductory offer.

Completing a balance transfer is easy. You can do it on the phone or online, and it should only take a few minutes.

What You Need

You will need the account number and balance of the credit card that has the debt.  These cards will be referred to as the “transfer from” account. If you have a $3,000 balance at Discover, and you want to transfer it to your new Barclaycard account, then you will need the account number and balance of the Discover account.  And, in this example:

  • The transfer from account is Discover.
  • The transfer to account is Bank of America.

Once you have that information, you are ready to go.

Call

You can call the customer service number on the back of your credit card, and they will be more than happy to help you complete the balance transfer. The phone representative will go through security checks and then ask for the credit card number and amount of debt that you want to transfer. Call center employees often receive a bonus to complete a balance transfer, so you will usually find a very eager person on the other side of the telephone line.

The bank makes the payment to your credit card for you.  If you are close to your due date, I recommend making the minimum payment to your card to ensure that you do not have any late fees. The payment (in this example, from Barclaycard to Discover), can take up to 3 weeks. It is usually faster, but you should not take any chances and want to avoid being hit with a late fee.

Online

Most banks make it easy to complete a balance transfer online. Once you receive your credit card, you will need to sign up for online banking. Below, we will show you how to complete an online balance transfer with Barclaycard. Click on these names if you’re looking for a step-by-step guide for: Discover, Capital OneChase or Barclaycard.

Step 1

Login to your account go to “Transfers” and select “For credit card balance transfers”.

bofabt1

Step 2

Select which account you’d like to use.

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Step 3

Select an offer. You should see the introductory offer listed.

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Step 4

  • The account number of the credit card that has your debt right now.  This is the account number of the transfer from account.
  • The amount that you want to transfer

Most banks have a limit on the total amount that you can transfer.

bofabt4

Step 5

You will then be shown the terms and conditions of the balance transfer offer, which you will need to accept.

Here are the most important items:

  • Make sure the terms of the balance transfer match the terms of the offer when you applied. If you are expecting a 0% fee and a 0% interest rate for 15 months, make sure that is what you see. If there are any issues, call the bank directly.
  • Make sure you pay on time.  If you go 60 days late, you will lose your balance transfer offer

Step 6

You will then receive your confirmation.  Bank of America will pay your existing credit card bill to roll the debt over to their bank.  But, it can take up to 3 weeks.  So, we recommend that you make the minimum payment if your bill is due in the next 3 weeks.

Remember

  1. Make sure you pay on time.  Paying late (60 days) can lead to a loss of your 0% interest rate.  And it would go to the penalty rate.
  2. Take full advantage of the balance transfer period to pay down as much of your debt as possible.
Brian Karimzad
Brian Karimzad |

Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Balance Transfer, Pay Down My Debt

How to Use a Balance Transfer Check to Deposit Funds into Your Bank Account

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Pretty Young Multiethnic Woman Holding Phone and Credit Card Using Laptop.

If you’re struggling to pay debt on a high-interest credit card, you’ve probably considered using a balance transfer check.

A balance transfer is when you take a balance from Credit Card A with a high interest rate and transfer it to Credit Card B, which is offering a low or 0% APR promotional period. And your credit card company might send you checks in the mail to transfer a balance.

What is a Balance Transfer Check?

A balance transfer check is like a typical check except it’s issued by your credit card company and used to withdraw cash from your credit line. You can write out a check directly to the company that has the debt you want to pay off. Or you can write a balance transfer check payable to yourself for a cash deposit.

Here’s an example. Say you open up a balance transfer card with a $15,000 credit line and you want to pay off the last $5,000 of your student loan. You make out a balance transfer check of $5,000 payable to yourself.

Once you get the cash in your bank account, you pay off the student loan with your balance transfer. Then you enjoy an interest-free period on the $5,000 balance that’s now sitting on the balance transfer card.

The Good and Bad of the Balance Transfer Check

Besides using the balance transfer check to pay off debt, you may able to use it to obtain cold-hard cash. In this scenario, you would keep some of the cash or all of it instead of using it to repay a debt. This isn’t a good idea if you’re deep in debt. It’s not free money and you’ll eventually owe interest on it.

Some balance transfer checks have a fee of 3% to 5% per transfer, however, these fees are often much less than you’d pay in interest at existing rates. You’re also required to transfer a balance within a certain timeframe typically within 60 days for it to qualify for the deal.

You can avoid a 3% (or 5%) balance transfer by opening a new credit card that has a special intro offer waiving the balance transfer fee. Our favorite offer comes with the Chase Slate® credit card. There is a $0 intro balance transfer fee for transfers made within the first 60 days of account opening and 0% intro APR for 15 months on purchases and balance transfers. The card charges no annual fee. You can learn more and apply for the card on Chase's website. Just remember: you can only use a balance transfer to pay off other credit card debt. If you are looking for cash, this is not the best option.

There are a few other things to keep in mind when using a balance transfer check.

First, not all credit card companies offer balance transfer checks as a way to transfer money. If your sole reason for signing up for a balance transfer card is using a balance transfer check, you need to read through the terms or reach out to the credit card company to make sure it’s an option. Otherwise, you could end up with a balance transfer card promotion that serves no purpose.

Even if you do happen to find a credit card company that offers balance transfer checks, verify that the process of obtaining a balance transfer check will happen quickly. As mentioned above, balance transfer deals usually have a deadline. If you transfer a debt after the deadline, it won’t qualify for the promotion.

Try to pay off the balance before the end of the promotional period, especially on debts like student loans. If you use a balance transfer to pay off a student loan debt at 8%, then dropping to 0% sounds great. But if you have a lingering balance of say $1,000 after the promotional period is up, your debt has gone from a high of 8% to probably 18%! Be sure you have an actionable and realistic plan to pay off the debt before using your balance transfer.

Beware of the Cash Advance APR

If you receive a check in the mail from your credit card company, just make sure you read the terms and conditions carefully. Most of the time, credit card companies will only send checks that have 0% promotional APRs, or low rate promotional APRs.

This is a much better path than taking out a cash advance on a credit card. With a cash advance, most credit card companies will charge an up-front fee and there is no grace period. Even worse, most cash advance APRs are much higher than purchase APRs (although you should check with your card issuer).

In general, a check offered by your credit card company will be a much better deal than a standard cash advance.

Final Word

We can’t stress enough the importance of making sure a credit card company offers balance transfer checks if that’s the method you want to use. For the most part, transferring a debt from one credit card to another online is the most convenient way to take advantage of a balance transfer special which is something to consider.

If you plan to use a credit card check to increase your bank account balance, it may cost you. Do your homework before hastily writing out a check from your credit card company.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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Balance Transfer, Building Credit

How a Balance Transfer Affects Your Credit Score

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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A balance transfer is an extremely effective way to cut down the amount of interest you pay on your debt. Applying for a balance transfer does require a hard inquiry on your credit, which is likely to impact your credit score.

But there’s no reason to freak out.

How Your Score Will Be Affected

According to FICO, a hard inquiry on your credit results in a score drop of about five points or less. Then, after a few months of appropriately using your credit by paying your debts on time, you’re likely to see your score bounce back up.

In fact, you may even see your score increase. This is because while new credit makes up 10% of your credit score, the amount you owe accounts for 30%. A huge component of the amounts you owe isn’t necessarily dependent on the actual dollar amount, but rather on your credit utilization ratio. To find this ratio, you divide how much you owe by your total available credit limit (across all cards).

Let’s say you had $7,500 in credit card debt, and it was your only debt. You only have one credit card with a $10,000 limit. You applied for another card that was offering you a reduced interest rate to entice you to do a balance transfer, and you took it. That card gave you an additional credit line of $5,000.

There was a 3% fee to transfer the $7,500, so now your total debt is $7,725. Where your credit utilization used to be 75%, now it is only 52%. You may owe a bit more money, but since your credit utilization went down, you’re likely to see your credit score jump up a little bit. The $225 extra will probably end up saving you money, but let’s walk through how.

How a Balance Transfer Can Save You Money

The fact that you now owe an additional $225 may make you cringe, but in all reality, the balance transfer will save you money long-term. In this example, you were offered an introductory interest rate of 0% for 18 months and then 15% APR after the promotional period ends. You currently pay 18% APR on your $7,500 debt and make monthly payments of $200.

If you don’t take the balance transfer and make the $200 monthly payment, it will take you 56 months and cost $3,604 in interest to get debt free.

If you take the balance transfer and make the same $200 monthly payment, you could be debt free in 43 months and only pay $900 in both interest and fees (that $225 to transfer the balance). You could even transfer the balance at the end of your first promotional period to another 0% APR offer with no fee for 15 months and be debt free in 40 months and pay $423 in interest and fees.

That initial hit on your credit score and $225 fee will save you $2,704 in interest with one balance transfer or $3,181 with multiple balance transfers.

Well worth the price.

When You Might Want to Wait

If you credit score falls below the “good” range, which would mean your score is below 680, it may be wise to wait before applying for a balance transfer. Financial institutions generally will not accept your application if you’re at 679 or below, but they will have to complete the hard inquiry in order to get that information. That means your score is still likely to drop, but you won’t be seeing any of the rewards of decreased credit utilization.

If you’re close to the cutoff, waiting until you hit that magic 680 number may be a good idea. While you’re waiting, be sure to do things that are likely to improve your score, like:

  • Paying at least your minimum payments on time every month.
  • Paying all your other bills on time so nothing delinquent pops up on your credit report.

As you pay your minimum payments on time every month, your creditor likely be reporting positive information to the credit reporting agencies.  At the very least, they won’t be reporting negative information.

If you make more than the minimum payment, your balance will go down faster which will lower your credit utilization, and we’ve already seen how that positively affects your score.

After your score increases, you’ll be more likely to qualify for the balance transfer with low or no interest rates. At that point, taking the small hit will be worth it.

Another time you may want to wait before applying for a balance transfer is if you are thinking about taking out a mortgage in the near future. This is one of the biggest purchases you’re likely to make in your life. The higher your credit score when you apply, the lower your interest rates will be, so even a small hit from a hard inquiry could increase your interest rates.

Go For It

If you qualify and are not thinking about making a massive purchase in the near future, taking the temporary, small hit on your credit score is more than likely worth the savings. Just be sure to pay at least the minimum due every month once you’ve made the balance transfer; otherwise your interest rates will jump back up, negating the advantage of this strategy.

A good credit score is something to be leveraged. The entire reason you want one is to enable you to save money. While it might be nerve-wracking to watch it decrease slightly, paying more interest than you have to is a bigger cause for concern.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne at brynne@magnifymoney.com

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