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What is a Balance Transfer and When Is It a Good Idea?

What is a Balance Transfer and When Is It a Good Idea?

Balance transfers can be a great way to pay less interest and get out of debt faster.

Right now, Valley Credit Union is offering 0% interest for 6 months on balance transfers (new and existing cards). That’s why we’ve put together this post to explain more about balance transfers, how they work, and when they are a good idea. Keep reading to learn more, and feel free to reach out to us with any specific questions you have!

What is a balance transfer?

A balance transfer involves moving your high-interest debt to a credit card with a better rate. For example, a balance transfer to a Valley Credit Union card will give you 0% interest for a full 6 months with no balance transfer fees. That means you get to focus on paying off your debt without having to pay any interest on it for half a year.

This helps you get out of debt faster because your payments will go towards the principal balance instead of towards interest. In fact, depending on how much debt you have and how much interest you’re currently paying, it could save you hundreds of dollars in interest.

How does it work?

The first step is to choose a good balance transfer card that meets your needs. You may be able to use an existing card that you already have, but you might get a better deal by applying for a new one.

If you’re looking for a new card, try to find one that you want to keep using even after the initial 0% interest period is over. For most people, that means a card that has a low go-to rate (the card’s regular rate) and isn’t bogged down with hidden fees. The card’s security features and rewards program might be important to you too. (Here’s more information about our credit cards, which are a great option for anyone in the Salem, OR area.)

When is a balance transfer a good idea?

Rather than listing the pros and cons of a balance transfer, the best question to ask is: Is a balance transfer the right option for you? The answer depends mostly on your individual financial situation.

Factors that affect whether a balance transfer is right for you:

  1. How much debt you have and what kind of debt it is: If you have a lot of different types of debt and the situation has become unmanageable, you may be better off applying for a debt consolidation loan.
  2. Your credit: Having good credit makes it easier to get a great deal on a balance transfer card, but even if your credit isn’t perfect, that doesn’t mean a balance transfer isn’t a great option for you. We love to work with our members to get them the best deal possible.
  3. How much debt you’ll still have (if any) after the 0% interest period: Are you going to be able to pay off all your debt within the card’s 0% interest period? If so, that’s great! If not, make sure the new card you choose has a good go-to rate.
  4. The balance transfer fee: Our cards have no balance transfer fees, but some other cards do. If you’re considering applying for a card with a fee that’s higher than the amount you’d save on interest, you should look for a different card with no balance transfer fee.

Get 0% interest for 6 months on balance transfers at Valley Credit Union

If you live in the Salem, Oregon area, we would love to answer any questions you have and help you decide if a Valley Credit Union balance transfer is the best way to reduce your debt and pay less interest. As a credit union, we are a not-for-profit cooperative with no obligation to corporate shareholders and no agenda other than to help our members meet their financial goals. Call us today at (503) 364-7999.

About the Author

 Jake Turpin, Vice President of Member Services

Jake Turpin, Vice President of Member Services, recently marked his three-year milestone at Valley Credit Union. With more than 15 years of experience in the industry, Jake continuously seeks to strike the ideal balance between exceptional customer service and operational efficiency. Beyond his contributions to the credit union, Jake dedicates his time to coaching his children in baseball and soccer. And when he's not at the credit union or on the field, you're likely to find him at the gym, maintaining a well-rounded and active lifestyle.

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