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Get Your Finances On Track

Get Your Finances on Track with a Balance Transfer

Getting your family’s finances on track can be an uphill battle, especially if you are dealing with debt from multiple credit cards. Consolidating all of your credit cards payments into one by transferring the balances to a single card can help you get a better handle on your finances. Once you get a handle on your family’s finances, you and your partner can work together to meet and set other financial goals, like starting a retirement plan, investing, or saving up for a large purchase — like a new car.

However, we have to first make paying our debts off easier by consolidating. There are several reasons why transferring the balance from multiple cards, to a single card, can work in your favor.

A Single Payment

If you have multiple credit cards, then you’ll have multiple payments and multiple due dates that you have to keep track of. While some companies offer forgiveness for late payments, making a payment even one day late can often result in hefty fees.  If you’re close to your limit when the fee is assessed, it could push you over your limit, resulting in an additional fee. When you transfer the balance from multiple credit cards to one, you only have to worry about managing one payment and one due date.

Lower Payments

Depending on the number of cards and the balances on each, your monthly payments could be as low as $5 per month or upwards of $50 each. When you transfer the balance to one card, that one payment will usually be significantly less than the payments on all the other cards combined. With the money that you save by consolidating the cards, you could make a slightly larger monthly payment and pay off the balance even faster.

Better Interest Rates

Even if you just have one card, transferring your balance to a lower interest rate card can lower your monthly payments, and reduce the amount of time it will take to pay it off. When you are searching for the best balance transfer options, be sure to include interest rates in your search.

A Credit Boost

When you transfer the balance, those other cards show as being paid in full. From a credit rating standpoint, it looks better when you pay in full, rather than keep a running balance on multiple cards. Plus, having multiple accounts with money due could make it look like you have too much debt.  One balance on one account looks better to creditors, and could even raise your rating with the major credit bureaus.

Better Negotiating Power

When you pay off your other cards by transferring the balance, you are in a better position to negotiate lower interest rates on those cards. You can also negotiate for limit increases and other changes to your other accounts.

Free Up Your Other Cards

Transferring the balance to another card frees up that card for emergencies. However, since the whole point of transferring the balance is to have fewer, and lower, payments. Still, there could be times when you need access to emergency funds, so keep the old cards on hand, and use them wisely.

By transferring balances from your old credit cards to a new one, you can save money and pay off your debts at the same time. What are some tips you have for transferring balances?

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