Credit card debt is all too common. If you have it, you probably have it bad. The average household with credit card debt has a balance of more than $16,000, according to NerdWallet’s Annual Household Debt Study. Households with credit card debt pay an average of $1,292 per year in interest.
For those looking to pay off their debt, the Nerds recommend getting a good balance transfer credit card credit that charges low interest for a year or more. These cards allow you to spend more money eliminating debt. But most cards charge a fee for transferring a balance, usually 3% to 5% of the amount transferred. That eats into the money you save in interest.
If you want to transfer a balance without paying a fee, it’s best to use a credit union.
Why credit unions?
While there are a few very large credit unions, most are small financial institutions with a mission to help the communities they serve. They are owned by the members and return their profits to their customers in the form of reduced costs. That means they often offer financial products with very competitive rates and fees, even if they can’t match the big banks when it comes to a variety of products.
Especially for balance transfers, credit unions are a good place to go for cheap credit cards.
Credit Union Balance Transfer Offers
The Lake Michigan Credit Union Prime Platinum Card appears on many of NerdWallet’s “best of” lists. The $0and membership is available to anyone who makes a one-time donation of $5 to the ALS Association. There is no 0% APR offer, but there are no balance transfer fees either. The current APR is only 3 percentage points above the prime rate. That’s very low for a credit card.
The DCU Visa® Platinum Rewards Credit Card does not charge a balance transfer fee. Current APR is 11.25% – 18.00% Variable APR — not 0%, but if you have a balance on a card with a higher interest rate, a wire transfer can lead to savings. The $0, and it’s available to those with average credit, meaning you’ll need a credit score of at least 630 to qualify. If you have bad credit, DCU Visa® Platinum Secured Credit Card is also an option.
The Signature visa defender is much more restrictive than the other cards on our list. In fact, you can only apply for this card if you are on active duty in the military, retired, or honorably discharged. But we’re mentioning it here because it’s such a good deal. It’s virtually free, and that includes balance transfer fees. In terms of interest you pay you 0% for 12 months on balance transfers, and then the current APR of 9.24% – 17.99% Variable.
Don’t give major credit card issuers a full discount
If you’d rather work with a major credit card company than a credit union, you may still be able to score a good balance transfer deal. Free balance transfer offers are rare from the major banks, but they do exist.
The Power of Free Balance Transfers
Transferring a balance to a card with a lower interest rate is a great strategy for paying down debt, especially if you can’t pay interest at all for a while. By finding a card that doesn’t charge you a balance transfer fee, you can spend more of your money paying off your balance.
When looking at balance transfer credit cards, don’t forget to look beyond the big banks. Your neighborhood credit union may surprise you.