Debt is never a fun topic to discuss, but it is an important one to understand. Debt can become a burden, but it can also be utilized as a useful financial tool for solving funding problems.

When debt is unmanaged and becomes too much to overcome, that is when people look towards solutions like “debt consolidation” or a “balance transfer.” But what does this even mean?

Debt Consolidation and Balance Transfers

Balance transfers and debt consolidation loans are strategies that can help with reducing the burdens of debt like high-interest rates. The basic plan behind a balance transfer is that you move your debt from a high-interest rate to a lower one. If only it were always as simple as that!

If you don’t do your homework, you could end up worse off than you are now with higher interest. However, with an accurate handle on the amount and type of debt you have, some smart decisions could put you back on track.

So here’s what you need to keep in mind when taking advantage of balance transfers or debt consolidation loans. Done correctly, you can get your debt under control.

  • Is there a balance transfer charge? Some card companies will offer a free transfer, but some charge up to 3% or even 5% of the balance. Will the reduction in interest more than make up for what you’re adding to the debt?
  • How long is the low-interest rate offered? Whether it’s zero interest or low interest, you need to know how long it will last. Will it be long enough to make a dent in your debt? Six months might not be enough, but twelve months could help you significantly pay down the debt.
  • So what’s the interest after the introductory period? If you can’t pay off the debt during the introductory period, how much debt will you have to pay off at a higher rate? That rate at the end of your initial period could be exorbitant! It might not be as sweet of a deal as you thought.
  • Is the deal off if your payment is late? You could get slapped with more than a penalty fine. You could immediately lose the low introductory interest rate for a significantly higher one. Be sure to read the fine print!
  • Will you qualify for the balance transfer? If your credit rating is too low, some credit card companies will deny you a balance transfer. So know your numbers!

The sad truth about some big debt consolidation companies is that they’re in the business to profit. They aren’t necessarily trying to solve people’s debt.

Consider a balance transfer through United Financial Credit Union! We put you first, and we care about solving your debt concerns. When we treat you right, we know we earn your business for a lifetime.

Balance Transfers with United Financial

United Financial is currently offering consolidation loans, with rates as low as 5.50% APR. With this offer, you can consolidate all or some of your credit card debt. Beyond that, transferring multiple loans means you can receive a gift card on us!

Consolidating your debt means you have fewer payments to track, simplifying your finances! If being on time is a challenge for you and you lack the discipline to stay on track–we can help with automatic payments. Less late fees and fewer hits to your credit score.

In some cases, we can even help reduce your monthly payment. We’re here to help you find the right balance between covering your current expenses while paying down your debt. You need to pay enough to reduce your debt, but not so much that you can’t keep up with other monthly expenses.

United Financial Credit Union will work with you to find the payment amount and repayment schedule that works for you. In addition, we’re here to cheer you on! Will a credit card or consolidation loan company do that for you?

Debt is tricky, but it’s not unmanageable. Turn your finances around with a balance transfer consolidation loan from United Financial Credit Union. Let’s get started today!