Pennsylvania Association of Community Bankers
  • Home
  • About PACB
    • Our Team
    • Board of Directors 2022-2023
    • PACB Services, Inc.
    • Hall of Fame
    • Contact
  • Membership
    • Benefits of Associate Membership
    • Become A PACB Member!
    • Member Listing
    • Member Login
    • 2023 Sponsorship Opportunities
    • PACB INSPIRE Awards
    • PACB Job Board
    • PACB Connected Community Portal
  • Advocacy
    • PACB Advocacy and Issues
    • Capitol Connect - PACB Podcasts
    • Legislative Events
    • PACB Advocacy Events
    • Legislative Update Calls
    • FIRSTPAC
    • Legislative Column
    • Grass Roots Lobbying
    • ICBA Community Bank Advocacy
  • Education
    • Education & Event Calendar >
      • Be a PACB Speaker
    • Webinars
    • On-Demand Virtual Programming
    • NextGen"U"
    • Next Gen U - Fall 2022 Special Pricing Program
    • ICBA Community Banker U
    • PACB Foundation Scholarships
    • Center for Financial Training
    • SBS Institute Certification Programs
  • Communications
    • News
    • PACB CONNECT!
    • PPP News & Information
    • Coronavirus Resources
    • Consumer Services >
      • Consumer Tips
    • Hometown Banker Magazine
    • Hometown Banker Website
    • Social Media
    • Photo Galleries
    • Video Collections
  • 2023 Convention
    • 2023 Attendee Information
    • 2023 Exhibitor Information
    • 2023 Sponsorships
  • Advertising Opportunities
  • Home
  • About PACB
    • Our Team
    • Board of Directors 2022-2023
    • PACB Services, Inc.
    • Hall of Fame
    • Contact
  • Membership
    • Benefits of Associate Membership
    • Become A PACB Member!
    • Member Listing
    • Member Login
    • 2023 Sponsorship Opportunities
    • PACB INSPIRE Awards
    • PACB Job Board
    • PACB Connected Community Portal
  • Advocacy
    • PACB Advocacy and Issues
    • Capitol Connect - PACB Podcasts
    • Legislative Events
    • PACB Advocacy Events
    • Legislative Update Calls
    • FIRSTPAC
    • Legislative Column
    • Grass Roots Lobbying
    • ICBA Community Bank Advocacy
  • Education
    • Education & Event Calendar >
      • Be a PACB Speaker
    • Webinars
    • On-Demand Virtual Programming
    • NextGen"U"
    • Next Gen U - Fall 2022 Special Pricing Program
    • ICBA Community Banker U
    • PACB Foundation Scholarships
    • Center for Financial Training
    • SBS Institute Certification Programs
  • Communications
    • News
    • PACB CONNECT!
    • PPP News & Information
    • Coronavirus Resources
    • Consumer Services >
      • Consumer Tips
    • Hometown Banker Magazine
    • Hometown Banker Website
    • Social Media
    • Photo Galleries
    • Video Collections
  • 2023 Convention
    • 2023 Attendee Information
    • 2023 Exhibitor Information
    • 2023 Sponsorships
  • Advertising Opportunities

Consumer Tips

Know the Facts Before You Transfer Credit Cards

3/1/2013

 
Picture of a female choosing a credit card from a group of 3 credit cards
​When you see five or six credit cards every time you open your wallet, you may consider one of those credit card transfer advertisements you receive on a weekly basis. You know the ads—the ones that offer a zero- or low-interest rate for a period ranging from three months to a year if you transfer your credit card balance to a new card.

It is not unusual for the average American family to carry a credit card balance of $10,000 or more. However, this could affect your credit score, which is determined by your credit card utilization rate. While there is no ideal utilization rate, it is generally recommended that your credit card debt be no more than 25 percent of your total available credit on all of your credit cards combined. This means if you have four credit cards with a combined credit limit of $20,000, your combined debt should not exceed $5,000.

For savvy consumers, taking advantage of a credit card balance transfer may help credit scores, but be sure to first consider the risks and pitfalls. Balance transfers allow consumers to pay down or eliminate debt without paying additional interest for the time period described in the offer. Once approved for a transfer, it takes about six weeks to transfer the old balance to the new card. For the next six months or the length of zero-percent financing, 100 percent of payments will go directly to paying down credit card debt.

The credit card company may choose to pay off the balance from the old card in several ways:
  • Send money to the consumer's bank account so that he or she can pay off the balance
  • Wire the money directly to the old credit card to pay off the balance
  • Send the consumer a balance transfer check to pay off the old debt

Be sure to read the fine print before accepting any of these offers. Just because the large print promises a zero-percent interest rate, you may not qualify to receive it. Once you receive your new card, you may find a different interest rate. Also, look for both zero-percent interest for transfer balances and purchases during the introductory period. The company may not charge interest on the transfer, but that may not equate to zero-percent interest on purchases during that time. The company may also charge a $50 or $75 fee for a balance transfer.

Shop for cards with low-interest rates, cash-back perks and fraud liability in addition to no hidden fees, annual fee or new membership fee. It is also advisable to always pay more than the minimum payment each month to lower your overall credit card debt.

Keep in mind that credit card companies do not make these offers out of the goodness of their hearts. They are businesses and their job is to make money, and they make a fortune from interest rates and fees. These companies are taking the risk that the consumer will either fail to pay the full balance during the introductory period, pay late or miss a payment. At that point, a company can automatically increase the interest from zero percent to 15 percent or even higher.

Once you make the transfer, be sure to put away your old card so you will not be tempted to use it and return to the debt cycle. Remember that balance transfer offers can be a good thing in helping to eliminate debt. Just be sure you know all of the facts first.

This information is provided with the understanding that the association is not engaged in rendering specific legal, accounting, or other professional services.  If specific expert assistance is required, the services of a competent, professional person should be sought.

Provided as a public service by the Pennsylvania Association of Community Bankers.

Comments are closed.

    Author

    Write something about yourself. No need to be fancy, just an overview.

    Archives

    December 2017
    November 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    January 2017
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    March 2016
    February 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    June 2015
    May 2015
    March 2015
    February 2015
    January 2015
    December 2014
    October 2014
    August 2014
    June 2014
    April 2014
    February 2014
    October 2013
    September 2013
    May 2013
    April 2013
    March 2013
    October 2012
    September 2012
    August 2012
    July 2012
    May 2012
    April 2012
    March 2012
    November 2011
    October 2011
    September 2011
    August 2011
    June 2011

    Categories

    All
    Budget
    Charity
    Children
    CHIP
    Christmas
    College
    Community Banking Month
    Consumer Tips
    Credit
    Debit
    Debt
    Disaster Preparedness
    Donations
    Elderly
    EMV
    Financial Literacy
    Fraud
    Healthcare
    Insurance
    Investment
    Legal
    Loan
    Mortgage
    Overdraft
    Overdraft Protection
    Recession
    Retirement
    Security
    Technology
    Travel
    Will

    RSS Feed

Upcoming Events


PACB Services, Inc. Preferred Providers

Pennsylvania Association of Community Bankers  
800 N. 3rd Street, Suite 304
Harrisburg, PA 17102


​Phone: (717) 231-7447

pacb@pacb.org | sitemap
(C) All Rights Reserved
​Our Privacy Policy
      Our Copyright Policy
Picture
"To empower community banks to make positive impact within the communities they serve."