See What the Big Deal Is With A Balance Transfer
Today, the average American household with credit card debt has balances topping $16,000—and pays almost $1,300 a year in credit card interest1. Add on loans, medical bills, and more, and you could be managing multiple bills and paying a lot of interest.
So how can you master your debt? Let’s see how Jacob and Emma handle it.
Both have about $3,000 in high-rate debt from credit cards, loans, medical bills, and more.
Jacob thinks, “I have a plan to get out of debt. I got this.” But Emma knows she’s spending too much on interest and decides to do something about it—a balance transfer.
So while Jacob keeps juggling his high-interest balances, Emma transfers her balances to one card to get a low promo rate. She knows that low promo rate will expire, so she makes a plan to pay off her balances before her rate goes up.
Jacob’s only making minimum payments and struggling to keep track of all his monthly bills. But Emma has just one lower payment to manage now.
Each of Jacob’s balances keeps racking up interest. Meanwhile, Emma’s saving money on interest—and because she hasn’t made purchases on her balance transfer card, she’s avoiding extra interest charges.
Because all that interest can really add up.
It makes it hard for Jacob to get ahead. But Emma can use the money that was going toward interest to pay down her principle.
So while Jacob keeps spending a lot on interest instead of paying down debt, Emma’s paying down her debt.
Be Like Emma
And start saving on your high-interest debt. A balance transfer can be a smart financial tool that helps cut your interest payments on your high-rate balances so you can get ahead.
If you usually pay for purchases in full each month to avoid interest, transferring a balance will change that. You will be charged interest on purchases unless you choose to pay your entire balance in full, including any transferred balances, by the first payment due date.