Having a large amount of credit card debt is never fun and it feels even worse during the holidays. After all, how are you supposed to buy gifts for your family if you’re still trying to pay off your past spending?
One strategy that can help you control your credit card debt is to transfer your balances onto another credit card or loan with a lower interest rate or with a low introductory Annual Percentage Rate (APR) on balance transfers. This would reduce the amount you’re paying in interest, which leaves more money to pay off your balances. Important note, keep in mind that any new credit card you transfer a balance to will have a limit on the amount you can transfer over, in addition some card issuers do not allow balance transfers between cards within their program, so be sure to check out the terms of the offer for additional information before you make a decision.
As with any credit card, you must be responsible with your spending so you’re not adding more debt and increasing the balances on your cards. Actual savings vary depending on account usage and payment behavior. And as you look these over understand that the “credit needed” is one indicator that you may be eligible for the offer, keep in mind that credit needed by itself does not guarantee or imply approval for any credit card or loan, or that you will be approved for the terms you applied for. Lenders, credit card issuers and other financial institutions use a variety of different types of credit score models as well as other criteria to make credit and lending decisions.
If you’re interested in saving on interest by transferring your higher rate credit card debt to an offer with a lower rate or a with a low introductory APR on balance transfers, here are three options we think you may want to consider.
Chase Slate® credit card
Summary – A balance transfer credit card with no annual fee
Credit needed: Excellent/Good
If you’re looking to pay off credit card debt, check out this offer from the Chase Slate® credit card. Take advantage of the 0% introductory Annual Percentage Rate (APR) for 15 months on purchases and balance transfers from account opening. After the introductory APR period ends an ongoing variable APR currently at 14.99%–23.74% applies to both purchases and balance transfers. With responsible use by you, this card can aid you in reducing your credit card debt. This may buy you time to pay off your existing balances and pay down or pay off your holiday shopping balances.
What we think makes the Chase Slate® credit card truly special is that they offer a $0 introductory balance transfer fee for the first 60 days your account is open. After that, the fee for future balance transfer transactions is 5% of the amount transferred, with a minimum of $5. Other credit card offers may generally charge a 3-5% balance transfer fee on the amount transferred over. For example, if you were approved to transfer $10,000 in credit card debt you could save $300 by transferring a balance to Chase Slate® credit card during the first 60 days of account opening rather than to a card with a 3% balance transfer fee.
The downside of this card is that it doesn’t offer a rewards program. However, if your only priority is paying off your debt, the 0% introductory APR on balance transfer offer, with responsible use by you, may help you achieve your goal.
Terms apply.
LendingClub
Summary – A loan that can be used to pay off your credit cards. There is no fee or credit score impact for checking what rate you qualify for.
Credit needed: *Excellent
LendingClub is an online lender that specializes in approving loans quickly. You can currently borrow up to $40,000 through their personal loan program. When you apply, they will tell you what your interest rate would be and how much you’d need to pay per month to pay the loan back. Once your loan application has been approved and is backed by investors and after you accept the loan (and has your agreement of all the required agreements and disclosures) and it’s funded, your loan proceeds are electronically transferred to the bank account you’ve provided and you can use the loan proceeds as you wish, including paying off your credit card. Your loan with LendingClub is subject to a loan origination fee which ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. According to the LendingClub website the average origination fee is 5.2% (as of 12/5/18 YTD).
Depending on the interest rate you qualify for, this may be an effective way to pay off your debt. For example, if you qualify for a loan through LendingClub at a fixed rate of 8% APR while your credit card is a variable APR of 16%, you’d cut your monthly interest charges in half by using LendingClub. LendingClub is also worth considering if you can’t qualify for a new credit card. They may be more accepting of lower credit scores in exchange for a higher interest rate. However your credit score is not the only criteria used to determine if you are eligible for a loan, as previously mentioned, all lenders use a variety of different types of credit score models as well as other criteria to make credit and lending decisions. Your actual rate depends upon criteria such as your credit score, loan amount, loan term, credit usage and credit history.
What’s nice about this loan is that there is no down payment and there isn’t a prepayment penalty or prepayment fee. If you want to pay off your debt more quickly to save on interest you can, and LendingClub won’t charge you an extra fee. They also may have a decision on your loan application within a few days, which is much faster than a bank loan, however individual situations vary so in some cases it may take longer. Finally, you can check to see what interest rate you may qualify for online and it won’t impact your credit score. They will give you an estimate and you can decide whether or not you want to take out the loan.
Terms apply.
Final Note
Don’t let your credit card balances bring you down this holiday season. By taking advantage of one of these, or a similar program, and with responsible management by you, you can have the tools to help pay down (or pay off) your transferred balances.
By lowering the interest rate on your credit card debt (saving you money on finance charges), this would reduce the amount you’re paying in interest, which lowers the monthly payment due, which leaves more money to pay off your transferred balances, and ideally, as a result, can help you pay down (or pay off) your transferred balances.
* Only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR depends upon a variety of factors including but not limited to your credit score, loan amount, loan term, credit usage, and history.
‡ Approvals with these TransUnion Vantage 3 credit scores have been received by Credit Sesame members. Average and Lowest scores are meant to serve as general guidelines only and approval is not guaranteed. Factors beyond credit scores can and may affect credit card approval. Each respective lender / credit card issuer is responsible for approval.
Independent Review Disclaimer: All the information about the Discover it® Balance Transfer, and Chase Slate® credit card have been collected independently by CreditSesame.com and have not been reviewed or provided by the issuers of these cards. The Discover it® Balance Transfer, and Chase Slate® credit card are not available through CreditSesame.com.
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