We're just a few weeks into the new year, and you may have a new year's resolution to improve your financial situation. If you haven't started yet, it's not too late.
Jeremy Blair, from Mountain America Credit Union, joined us with how a balance transfer can help you get on track with your debt paydown goals.
You complete a balance transfer when you move one credit card balance to another credit card.
Consumers usually do this to take advantage of a lower interest rate on their credit card balance, which can help them save money and even pay off their debt sooner.
Many credit cards offer promotions with their balance transfer.
For example, an introductory interest rate lower than the interest rate on your existing balance saves you money on finance charges.
You may also see balance transfer offers that give cash back upon completion of the balance transfer, which you can apply to the balance.
Blair told us there are some things to avoid if you use a balance transfer.
For example, avoid increasing your debt on your credit cards.
Increasing your debt can make it more challenging to pay off within a specific timeframe.
If you are taking advantage of a low-interest rate, know when the rate will change and what the new rate will be so that you can pay off your debt in time and maximize your savings.
Blair says you also need to be mindful of fees.
You'll want to know if the credit card charges an annual fee. An annual fee is a fee the financial institution charges for having a credit account.
Another fee to keep an eye out for is the balance transfer fee. Generally, this is 3-5 percent of the balance you transfer to the new card. If you're moving a $10,000 balance, you'll pay $300-500 just in fees.
On many credit cards, these fees can reduce the amount you can transfer as you want to stay within your credit limit.
Mountain America Credit Union offers a Visa credit card with competitive rates, and you'll enjoy even more savings because you don't have to pay an annual or balance transfer fee.
Stop by your closest Mountain America Credit Union branch to learn more or visit macu.com.
**Membership required-based on eligibility.
**Loans on approved credit.
