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Pay Off Debt Sooner With a Balance Transfer

Matt Clay,

January 14, 2014

Managing Your Money


When you have outstanding debt, it can be helpful to consolidate it into one payment.  While debt consolidation loans are a good option, you might also consider transferring your existing debt to a credit card with a lower rate. Transferring a balance is easy, and can be a quick way to reduce the interest you’re paying. Many credit card companies will provide an incentive or promotional offer for customers to transfer a balance by waiving the balance transfer fee or offering a lower interest rate for the amount transferred.

Credit Card With a 29% APR
Balance $5,000
Fixed Payment $250
Months to Payoff 28
Finance Charges Paid $1,914.21
Credit Card With a 12% APR
Balance $5,000
Fixed Payment $250
Months to Payoff 23
Finance Charges Paid $606.74

A balance transfer allows you to pay down a higher credit card balance by transferring an ongoing balance (commonly referred to as a revolving balance) to a card account that charges lower interest. As a result, this balance transfer can potentially save hundreds of dollars in interest. For example, let’s say you transfer a balance of $5,000 from a card account that is charging 29% interest to a card account that only charges a rate of 12%. If you make a fixed payment of $250 per month, the balance would be paid off five months earlier, saving you over $1,300 in interest charges.

Even if you’re not considering a balance transfer, it is wise to make a plan and budget a fixed payment amount each month to ensure that you are paying off your debt and minimizing finance charges.

If you’re revolving a balance on your credit card account and would like to learn more about balance transfers or other options for managing your credit card debt, consider contacting a personal banker at Union Bank to discuss your options.

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Hello, I have a loan with UBT, I also have a credit card-interest is "relatively" low but the quicker I can pay it off the better. And 12% is considerably lower of course. I would like to find out if I am eligible for this; could you please let me know. Thank you

Hi Paul, Someone from our team is going to contact you. Thanks for reaching out!

Credit Cards Subject to Credit Approval.

This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.