Pros and cons of a credit card balance transfer

A credit card offer that features a low- or 0 percent-interest introductory period on debt transferred from another credit card can be an efficient way to vanquish a large credit card balance over time without shelling out any (or very little) interest. Its also the only practical way to pay off one credit card with another. Credit card companies wont allow you to directly use a credit card to make a monthly payment.

Who should (and shouldnt) get one?

These cards are typically designed for and offered to individuals with good to excellent credit. You may not qualify if your credit isnt in tip-top shape. If you have damaged credit, a personal loan might be a better option, particularly if you can find a fixed-rate offer that is lower than your credit cards annual percentage rate.

Balance transfer cards are ideal for individuals struggling to pay off the principal of their credit card debt due to high monthly interest payments. With balance transfer cards, you can make one low-rate monthly credit card payment instead of several.

If you can really keep yourself on a budget . (a balance transfer credit card) can be a useful tool for paying down debts, says Thomas Nitzsche, a certified credit counselor and communications lead at Money Management International, a Sugar Land, Texas-based nonprofit credit counseling agency.

But if youre simply transferring balances from card to card, the new one wont eliminate your debt woes. In fact, you could wind up exacerbating them because balance transfers often involve fees and could carry high go-to interest rates once the introductory period is over.

You have to do a balance transfer for the right reasons, says John Ulzheimer, a nationally recognized credit expert formerly of FICO and Equifax. To do it to tread water for another 12 months before sinking is not worth it. To tread water while aggressively paying down your debt in 12 months – thats the right strategy.

Tips on balance transfer cards

Before jumping at an offer, read the fine print and calculate the costs. The key figures are the:

– Introductory interest rate.

– Annual percentage rate (APR) after the intro rate.

– Balance transfer fee.

– Minimum monthly payment.

Under federal law, the teaser rate must last at least six months. Many balance transfer credit cards will offer introductory rates for longer periods, anywhere from 9 to 18 months or sometimes even longer, Nitzsche says.

Use a credit card balance transfer calculator to figure out if youll be able to pay off the balance in full before the promotional period ends. Otherwise, you may end up paying a much higher rate on your credit balance.

In addition, stay away from using the card for further purchases while paying off the balance. Its important to steadily reduce your credit card balance on a monthly basis.

Dont forget to add in the cost of the balance transfer fee, which is typically around 3 percent of the balance. Also factor in what the new cards minimum monthly payment will be; often, its a percentage of the balance transfer.

Can I qualify?

Even if all the numbers pan out in favor of a balance transfer, you still have to qualify. That means you should have a good idea of what your credit looks like before applying.

Those with stellar credit (750 or above) will likely qualify for the best teaser rates. If your credit score falls below that, you may get a higher teaser rate, but it still may be lower than what youre paying now.

You have to set your expectations within the realm of reality, says Bruce McClary, vice president of public relations and external affairs with the National Foundation for Credit Counseling.

Dville to host Juneteenth Freedom Festival

Donaldsonville’s Juneteenth Celebration features various special guests and performing talents from all over the south such as Claude Bryant Reggae Allstars (12:30 -1 pm), DJ Derrick 1:30-3 p..), Bucket List Band (3-4 pm), Universal Language (4:30 -5:30 pm) and the Michael Foster Project (5:45-7 pm).

There will also be numerous workshops focusing on the theme of Financial Freedom. According to organizer Tamiko Garrison, financial gurus such as credit coaches, investment consultants, bankers, financial planners and tax attorneys will be on hand to discuss credit repair, investments and banking to assist families, teens and adults with securing financial freedom in their lives.

“The festival is about love, togetherness and a celebration of freedom,” Garrison said. “It is open to everyone. We have to remember our past so that we can learn from the good and never repeat the bad. The celebration is not just for the city, parish or state, it is for the world.”

For more information about the free event visit juneteenthdville.com.

5 Lowest 15-year Mortgage Rates

Obtaining a 15-year fixed rate mortgage instead of a traditional 30-year mortgage means homeowners can save thousands of dollars in interest. One drawback of a 15-year mortgage is that consumers will be locked into higher monthly compared to a traditional 30-year mortgage or a 5 or 7-year adjustable rate mortgage, which could put the squeeze on homeowners when times are tight, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, DC-based non-profit organization.

Cornerstone to honor Topeka banker for dedication to affordable housing

She will be the guest of honor at Cornerstone’s annual Housewarming Party fundraiser from 5:30 to 8 pm Thursday at the Kansas Expocentre’s Heritage Hall.

As lead banker at Capitol Federal for the Topeka Opportunity to Own (TOTO) loan program, Carter has frequently worked with Cornerstone’s tenants, Palmer said.

“She’s excited about what she does, and she works very hard to turn people into homeowners, and some of those have come through Cornerstone,” he said.

Cornerstone is an affordable housing provider that serves the “working poor.” Nearly 80 percent of its tenants don’t receive a government rent subsidy, according to its website.

Because Cornerstone owns all of its properties, Palmer said, its tenants become TOTO program homeowners. Through Housing and Credit Counseling Inc., they receive training on how to be a homeowner, such as upkeep and minor repairs, Palmer said. Once approved, he said, they “work with a lender, and that lender is usually Paulean Carter.”

Chris Burk, manager of HCCI’s credit counseling department, said one client’s experience captures Carter’s personality in a nutshell.

Before approving people for home loans, Burk explained, Capitol Federal wants to be able to see four lines of credit a person has had for at least a year to show how well they pay their bills. Sometimes they are willing to consider nontraditional types of credit, he said. One client had difficulty coming up with a fourth line of credit.

“The fourth one that Paulean was able to convince the underwriters to look at and accept was the lady’s church tithing that she’d been doing pretty much all her adult life, and used that as a line of credit,” Burk said. “That way, this lady was able to get the home loan.”

He said Carter “goes the extra mile” to help people get approved for home loans and to explain things to them, such as how they can improve their credit.

“She really cares about her clients,” Burk said.

Palmer said Cornerstone is excited to be giving Carter the award because of her years of dedication to affordable housing in Topeka.

This is the fifth year for Cornerstone’s Housewarming Party event. Awards previously have been given to people with strong connections to Cornerstone, Palmer said, but this year the committee expanded its search to people who have spent their careers dedicated to affordable housing. Carter’s name “came to the top of the list,” he said.

The Housewarming Party helps defray some costs of Cornerstone’s transitional housing program, in which people who are homeless may be referred by an agency for short-term stays during which they pay greatly reduced rent. The program aims to help people get back on their feet and move into Cornerstone’s affordable housing program or to other permanent housing.

Twenty-three of Cornerstone’s 175 housing units across Topeka are dedicated to housing people experiencing homelessness, according to Cornerstone’s website.

Tickets to the fundraiser cost $35 and are available in advance by calling (785) 232-1650 or emailing Palmer at chris@corner1.org. Tickets also will be available at the door.

Contact reporter Samantha Foster at (785) 295-1186 or @samfoster_ks on Twitter.