If you have high interest credit card debt that you can’t pay off immediately, use a balance transfer offer can be a smart money move. The less interest charges you pay, the more you can invest in eliminating primary debt.
But when your credit is fair, it can be a bit tricky. Fair credit can mean you may not qualify for some of the best balance transfer cards on the market. If you have fair credit and are looking to transfer a balance to another card, here’s what you need to know.
How does a balance transfer work?
The principle of a balance transfer is simple: take the balance or debt you have on a high interest credit card and transfer it to a new card that comes with a 0% APR introduction to offer. This decision can save you money since you will not pay any interest on this debt during the term of the promotional offer. But there are a few caveats to this transaction.
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For starters, most balance transfer cards will also charge you a balance transfer fee, typically ranging from 3% to 5% of the transferred amount. For example, if you transfer a $ 5,000 balance to a card that charges a 3% balance transfer fee, it will cost you $ 150 just to move your balance. Make sure you do the math to make sure that the balance transfer fee will ultimately cost you less than what you would pay in interest on the card you already own.
You should also be aware that you generally cannot transfer a balance from a card issued by a bank to a card issued by the same bank. So if you have debt on one card issued by Chase, you will not be able to transfer that balance to another card issued by Chase. Make sure you understand how to operate a balance transfer for you before you dive.
Balance transfer card options if you have fair credit
When applying for a new loan, the potential lender should consider how risky it is to give you credit. And your credit score is an indicator of how likely you are to default on a loan.
Cards aimed at those with fair credit usually aren’t loaded with perks like rewards or long 0% APR offers. This can make finding a credit card with a balance transfer offer when you have fair credit a bit like a needle in a haystack.
However, you can consider the following options.
Aspire FCU Platinum MastercardÂ®*
- $ 0 annual fee
- 0% introductory APR: 0% introductory APR for 6 months from the opening of the account on purchases and balance transfers, then a variable APR depending on your solvency
- Balance transfer fee of $ 5 or 2% of the amount of each transfer, whichever is greater
- As Aspire is a credit union, you must be a member to apply for the card. Eligibility is limited to individuals working for an eligible employer affiliated with Aspire, by making a donation to Marine mammal stranding center or have a family member who is a member.
Read our full Aspire FCU Platinum Mastercard exam to learn more.
Navy Federal Credit Union Platinum Credit Card*
- $ 0 annual fee
- 0 introductory balance transfer offer
- Low and continuous APR of 5.99% to 18.00% Variable APR for those who qualify, which could make this card a great choice for someone who needs an extra long trail to pay off their debt .
- No balance transfer fees
- Because Navy Federal is a credit union, you must be a member to apply for the card. Eligibility is limited to persons affiliated with an eligible sector of the military, including the armed forces, the Ministry of Defense, the National Guard or family (including grandparents or grandchildren) or a household member of an eligible person.
A personal loan could be your best bet
The choices are quite limited when it comes to balance transfer cards for fair credit. But there is another option that may make better financial sense: a personal loan. These one-time lump sum loans often have lower interest rates than credit cards. And, because you’re paying off a personal loan in equal monthly installments, you won’t be stuck with a bloating balance like you can with a credit card.
Like most financial products, there are several types of personal loans in the market so it’s worth shopping around for the right one personal loan for debt consolidation that matches your particular situation.
Coming up with a plan to pay off your high interest credit card debt is a great financial deal. But when you have fair credit, it can be difficult to get approval for a balance transfer card that offers a lower interest rate than your current card. In this scenario, a personal loan may be the best option to pay off your debt at a lower rate.