It’s the same every month. Despite never missing a payment and incurring no new charges, your credit card balance decreases by only a few dollars. The slow progress is frustrating and may have you wondering if you’ll ever be debt-free.
A credit card balance transfer might help. When you transfer high interest rate debt to a low-interest rate credit card, you can immediately lower your required minimum payment. If your goal is to get out of debt faster, a lower interest rate can allow more of your monthly payment to apply to the principal balance.
To help you identify the best balance transfer offer for your financial situation, let’s clear up some common credit card balance transfer myths.
Myth #1: The fees for transferring a balance negates the potential savings.
Credit card issuers may charge a balance transfer fee. This amount is equal to a percentage of the total transfer amount, usually 3 to 5%. For example, a 5% transfer fee on a $5,000 balance transfer equals $250. This can reduce, but not offset, the benefit of completing the transfer.
Other cards, like Prince George’s Community Federal Credit Union’s Visa Elite Rewards® or Visa Platinum® credit cards, charge no balance transfer fees or annual fees, allowing the borrower to experience the full benefit of the new lower interest rate.
Myth #2: When you transfer a credit card balance to a new credit card, the original credit card issuer will close your old account.
If approved for a credit card balance transfer, your original credit card remains active and you’re still responsible for all charges and required payments. This includes continuing to make payments until the balance transfer is confirmed and deciding whether to keep the original account open. Closing the credit account can harm your credit score since it reduces the total available credit and length of your credit history.
If continued spending using the old card becomes an issue, consider shredding the card or placing it in a safe deposit box, which can reduce the temptation to use the card.
Myth #3: You can only transfer one credit card balance to the new credit card.
The approved transfer balance amount, not your current number of debt obligations, will determine how much you can transfer to the new credit card. Eligible borrowers with multiple credit card balances as well as those with only one high balance card, can both benefit by shifting their debt to the new lower interest rate credit card, up to the approved balance transfer limit.
Cheryl Credit and Sam Spender each have $4,000 in credit card debt. They were each approved for a $4,500 credit card balance transfer.
Cheryl has three credit cards with balances totaling $4,000.
Is Cheryl able to transfer all three of her balances to her new lower interest rate credit card? Yes, since the total transfer amount of $4,000 is less than the approved balance transfer limit of $4,500.
Sam has one credit card with a balance of $5,000.
Is Sam able to transfer his entire balance to the new lower interest rate credit card? No, he can only transfer up to the approved transfer limit of $4,500. But he can still benefit from significant savings by having 90% of his debt transferred to a lower interest rate card.
Gather your credit card statements. Enter the current balances and APRs for each card into the Debt Relief Calculator and see for yourself how switching to a no annual fee Visa Elite Rewards® or Visa Platinum® credit card help you become debt-free sooner. Pay no balance transfer fees and receive a 2.99% APR on all balance transfers for six months from the date of card approval.*
Submit your credit card balance transfer form today!
*APR= Annual Percentage Rate. Introductory Balance Transfer APR is 2.99% for 6 months from date of account opening; then the standard Balance Transfer APR applies. Standard Balance Transfer APR: 8.99% to 17.99%, based on your creditworthiness. The Promotional Rate is not available on Visa Secured credit cards. This offer does not apply to balances transferred from Prince George’s Community Federal Credit Union loans. You may transfer up to your available credit limit. Please continue to make minimum payments on your other credit card(s) until the balance has been transferred. The other institution(s) will refund all overpayments. Payment of the account(s) authorized by you may not satisfy any outstanding balance(s) on the designated account(s). Prince George’s Community Federal Credit Union is not responsible for any outstanding balance(s) or additional charges in regard to such accounts, or for any changes resulting in any delay in the payment or transfer of balances. The total amount(s) transferred will be treated as a cash advance; finance charges will be applied from the day the balance(s) are transferred to your Prince George’s Community Federal Credit Union credit card account. Prince George’s Community Federal Credit Union reserves the right to refuse multiple transfers from the same credit card. Certain restrictions apply. For more information and conditions, please contact us.
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