Should I Make A Balance Transfer?


Q: I’m considering a balance transfer to an interest-free card. Is that a good idea?

A: Transferring some or all of your credit card debt to one that includes an introductory interest-free period can help you move toward a debt-free life. However, there are some things to be aware of. Consider these pros and cons:


Interest-free debt
Your biggest push for making a balance transfer is to get a break from the interest that’s added to your balance. Depending on the offer, that may be up to 21 months. Making a balance transfer will allow you to take a real bite out of your debt and make progress toward getting rid of it completely.

The more monthly bills you need to pay, the greater the chance of missing a payment. A balance transfer lets you consolidate the balance on several different cards into one, decreasing the number of monthly payments you need to make.

Taking this significant step toward paying down your debt may motivate more careful spending habits.


High interest fees
At the end of a predetermined amount of time with your new card, you’ll be hit with interest rates that are unusually high. While you may plan on paying down your balance before the interest rate kicks in, you may not be able to do so. Also, many balance transfer cards do not offer the same interest-free deal for new purchases.

Transfer fees
Most balance transfer offers charge a minimum of 3-5% of the balance you’re transferring. So, while you may not be incurring interest, the transfer isn’t always free.

You need excellent credit
If you’re considering a transfer, know that you often need to have a credit score of at least 700.

Increased monthly bills
Often, a company offering to accept interest-free balance transfers will only accept a portion of the amount, adding one more monthly bill to track. This increases your chances of missing a payment. If your entire balance can’t be transferred, give priority to your interest-free payment, but don’t neglect other bills.

Negative impact on your credit score
With the recent changes to the VantageScore system, having less available credit while using a small percentage of it is considered the smart choice. Opening a new card without closing an old one means you will have more available credit and may lower your score. Also, having lots of open cards will make lenders view you as a risk.

If you’re sinking in credit card debt but don’t think a balance transfer is for you, we can help! A personal loan might be a solid first step toward debt freedom. Call, click, or stop by an Insight Branch today, to hear about our competitive rates and options.

Have you ever made a balance transfer? Tell us all about it in the comments!

5 Ways to Raise Your Credit Score

credit-report1.jpgCredit score – even reading it might make you nervous. So many people have come into our branches asking about this mystery. What does it mean? How do I start it? How do I fix it? Before we give you some tips on how to boost your credit score, let’s explain what we are talking about.

  1. What is a credit report? It’s a report card of your history of paying bills and credit habits over a period of time. We like to compare it to homework.
  2. What is a credit score? It’s a “grade” given to you based on your history of paying bills and credit habits. It interprets how well you have done on “homework.” The higher the credit score, the better.
  3. What does it say about me? Lenders, insurance companies, employers, etc., look at your credit as a way to determine your trustworthiness. If your credit is high, you are more likely to get approved for a loan at a great rate, or maybe you won’t have to put a down payment on your new cell phone plan.

Now that you have a general idea of what we are talking about, here are some tips on how to boost that “grade” you are given based on your credit report.

  1. Pay your bills on time! – This accounts for approximately 35% of your score.
  2. Try to pay off your debt quickly, and keep your revolving debt below 30% of the available loan. Approximately 30% of your score is based on how much you owe to creditors.
  3. Get in the game – The length of your credit history contributes 15% of your score. If you decide you want to build credit, starting the process sooner is better.
  4. Have a healthy mix – The types of credit you have contribute to 10% of your score. Do you only have credit cards on your report? That appears as a red flag to lenders.
  5. Pay more than the minimum balance and do it early – This helps you pay down debt faster and reduces the amount of interest you will pay later.

What other tips and tricks do you know of to keep your credit score up? Share them in the comments below.

PS – Click here to check your credit report and learn more about credit reports and scores.

Money Smart Week Seminars

‘Money Smart Week @ your library’ is a national initiative between the American Library Association and the Federal Reserve Bank (Chicago) to provide financial literacy programming to help members of the community better manage their personal finances. Insight Credit Union has partnered with the Lake County Money Smart WeekLibrary System to provide a series of financial seminars during Money Smart Week that are FREE and open to the public. These seminars cover a variety of financial topics, including wills and trusts, mortgages, debit cards and identity theft. If you’re in the area, check them out! We hope to see you there!

  • Home Buyer Basics: Thurs, April 16 at 2pm at the Leesburg Public Library
    • Learn tips and tricks for buying a home, what you should know about the paperwork, the numbers and how to choose professional support.
  • Identity Theft – What’s Your Liability?: Tues, April 21 at 10am at the W.T. Bland Public Library, Mount Dora
    • Discover when you do and don’t have to give your Social Security number and how to minimize the risk of identity theft online and offline. You’ll also learn tips to protect yourself from phishing attacks and warning signs that you might be a victim of identity theft.
  • Financial ABC’s of Debit Cards: Tues, April 21 at 11am at the W.T. Bland Public Library, Mount Dora
    • This seminar will reveal tips for using a debit card wisely, alternative ways to use a debit card, and the differences between debit cards and credit cards.
  • Money Saving Tips and Tricks from a Travel Agent: Tues, April 21 at 2pm at the Leesburg Public Library
    • Travel agent Sheri Mruz will discuss money wasting blunders, money saving tips and how to get the most out of your vacation.
  • Florida Wills and Trusts, Deeds and Power of Attorney: Tues, April 21 at 6pm at the Tavares Civic Center
    • Attorney Tom Olsen will explain how to prepare wills in Florida, establish trusts and avoid probate.
  • Florida Wills and Trusts: Wed, April 22 at 10am at the Cagan Crossings Community Library, Clermont
    • Attorney Tom Olsen will explain how to prepare wills in Florida, establish trusts and avoid probate.
  • Identity Theft: Wed, April 22 at 11am at the Cagan Crossings Community Library, Clermont
    • Discover how to minimize the risk of identity theft online and offline. You’ll also learn what to do if you are a victim and where to get help. Registration is required. Please call: (352) 243-1840 to register.
  • Identity Theft: Thurs, April 23 at 1:30pm at the Astor County Public Library
    • Discover how to minimize the risk of identity theft online and offline.  You’ll also learn what to do if you are a victim and where to get help. No registration is required.  For more information, please call: (352) 759-9913.