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.

Mirror, Mirror on the Wall…

As we prepare to celebrate our nation’s independence, we felt it was fitting to  bring you the final installment of our Hit the Road to Financial Freedom series. Today’s topic can play a key role in one’s financial freedom and it’s important to understand what you’re looking at. Break out the mirror, folks, it’s time to take a peek at your credit!

Part 4: Creditability

Some aspects of life are “out of sight, out of mind,” kind of things.  Others are areas we blatantly try to ignore and hope everything is going smoothly.  It seems Credit Reports & Credit Scores fall into that area for most people.  Well Insight is here to help!  Let’s go over some frequently asked questions about Credit Reports and Credit Scores.  We will even include how to keep them in pristine condition!  Then we can discuss how to get your Credit Report and how often you should check it!

What is Credit?
Credit is the term lenders use to gauge your character as a borrower.  It’s the reputation you have for paying back funds loaned out to you.  The first question a lender asks is, “Do you have credit?”  Is there a history that shows your habits of paying back?  If the answer is no, then a lender will be cautious about lending to you.  If the answer is yes, then the lender will look at your report and score to gauge your reputation, on black and white paper, for paying back a loan before making the decision of whether or not to lend you money.

Do I need Credit?
Need is a strong word.  It’s more important to focus on what Credit will offer you! Then you can decide.

Credit can impact your employment opportunities, insurance approvals, security deposit on rentals, and your interest rates.  While you can pay cash for everything and avoid building your credit, some jobs require a credit check, and insurance premiums on the car you bought in cash, might be higher because you have not built a credit rapport that shows others you are a great bet.

As we go through the following information, you will be able to better determine how Credit impacts your life from a holistic perspective.

What is the difference between a Credit Report and a Credit Score?
These terms are sometimes used interchangeably, but they are two different things.  The Report is just that, a report.  It shows you the details of your bill-paying history.  The Score is the final “grade” you are assessed based on the details in the Report.  You can think of it in terms of school.  The results of your in-class work, homework, quizzes, midterms, and finals (report) determine what your final grade (score) for the class is.  There are three Credit Bureaus:  Equifax, Experian, and TransUnion.  You can look at them as the keepers of your report and score.  However, since there are three, you can have three similar but not exact Credit Reports and three similar but not exact Credit Scores.

What is on a Credit Report?

  • Identifying Information (including your Social Security number)
  • Lenders you’ve borrowed from and your bill-paying history with each of those lenders
  • Judgments, liens, bankruptcies, lawsuits, and/or other public records
  • Work history
  • Consumer statement(s)

Who can look at a Credit Report?

  • Lenders
  • Financial Institutions (even for the purpose of opening an account)
  • Insurance Companies
  • Landlords
  • Promising Employers

Doesn’t it hurt my Credit Score if I look at/pull my Credit Report too much?
Yes and no!  This is one of those tricky questions that people have trouble with.  To better understand the answer, you need to understand “inquiries” on your Credit Report.  An inquiry is a request to see your Credit Report.  A hard inquiry also known as a hard pull is usually done when you are actively seeking to borrow money or apply for a “financial” change, as I like to call it.  A financial change might be applying for a car loan, utilities, or an apartment/home loan, or getting a new cell phone provider. Any of these types of inquiries can show as a hard pull on your credit and that will drop your Credit Score.  However, note that if you are “shopping around” for rates on say, a car or home loan or student loan, you will only get one ding for a hard pull as long as it is within a reasonable amount of time.  You need to check the Credit Bureau websites to determine what that time frame is.  It could be 14 days or it could be 45 days.

There is also an inquiry called a soft inquiry or a soft pull.  You can see these inquiries on your Credit Report but those checking your report cannot see them.  These do not drop your Credit Score.  For example, when a potential employer pulls your credit, your Credit Score is not affected.

By law, you are able to pull one Credit Report from each of the three Credit Bureaus at no cost, per year.  This is also a soft pull and we suggest you do it regularly!  Insight recommends that you pull one of the three bureau reports every four months.  For example, in January, you can pull Equifax.  In May, pull Experian.  In September, pull TransUnion.  This gives you a pretty good idea of what’s going on with your report throughout the year.   There are several websites you can access to get your Report.  Check out our website here for some information and a link to your free reports.  Now remember, pulling your free report doesn’t mean you will see your Credit Score.  There are websites popping up that even give you access to your Score at no cost, but be very careful, and do your homework on whether or not the website is trustworthy.  Most websites will charge you to access your Score and they are required to provide overt notification of the cost.

It is important to check your Credit Report regularly and at the same time, it is important that you avoid unnecessary hard pulls on your Credit Report.

What if there is an error on my Credit Report?
Dispute it!  One of the reasons why we encourage you to check your report every month is that is gives you the opportunity to check for errors and identity fraud.  Errors, unfortunately, are NOT uncommon on Credit Reports, so it’s important that you check all the information, personal, employment, history, etc.  The great news is that the three Credit Bureaus have done a great job making it easy to dispute and correct information right online.  They also share information on disputes, which is incredibly helpful for us consumers!  If you dispute a line of credit on the report you receive from Equifax, Equifax will notify TransUnion and Experian of the dispute.  Talk about efficient!

How do I maintain a good Credit Report and a good Credit Score?

  1. Pay your bills on time
  2. Don’t add a lot of new credit in a short period of time
  3. Make sure you keep some of your older trade lines open (it shows longevity)
  4. Don’t co-sign for someone with poor credit
  5. Don’t keep lines of credit at or near the maximum of the credit line
  6. Maintain a robust portfolio of credit types (a store card, a credit card, an auto loan, a home loan, a personal loan- these are all different types of credit)

Do you want more information on this topic? Email us at to request a community seminar in your area!