If you’re carrying a balance on your card that’s a bit too high for comfort, you’re in good company. The average card balance in Oregon decreased by 15% from $5,498 in 2019 to $4,681 in 2020, and $6,156 to $5,238 in Washington, according to Experian. This highlights the struggle many people face: carrying a high balance month-over-month is a fast way to rack up interest fees. With the national average Annual Percentage Rate (APR) over 16.50 percent, carrying the average balance on your card from one month to the next still adds to your debt load—especially if you’re only making minimum payments. One strategy to help get debt and escalating interest fees under control is to use a balance transfer credit card.

Here are three situations where a balance transfer credit card makes the most sense:

When you can avoid a fee

Many balance transfer cards charge a fee for taking on the debt from your previous card. The typical fee is 3 percent of the balance you’re transferring, according to CreditCards.com. Some no-fee balance transfer offers could help you save money while implementing this debt-reducing strategy. However, if the fee is steep, it may be best to seek out other options.

When you can get a lower interest rate

The point of a balance transfer credit card is to save money while you whittle down your balance. If your interest goes down, and you make the same payments, you’ll pay off your debt faster. If your new card has a higher interest rate, that’ll only exacerbate the issue. Make sure you know your current interest rate and research the rates available to you through other cards.

Some balance transfer cards have low introductory APRs which may last somewhere between a few months to just over a year. When the promotional APR ends, your interest rate will likely rise to a more competitive rate, something closer to the average APR. Your new rate will then immediately apply to any balance you still have on your card.

Take the time to carefully weigh your options. If a balance transfer card offers only a slightly lower APR, plus charges a fee for the transfer, it may not be worth your while. Make sure you’re choosing a path that financially benefits you in the long-run.

When you have a payment plan in place

Transferring your balance to a new card can help you manage your debt, but it’s important to have a strategy to reduce the amount you owe. Without a plan in place, it could be all too easy to ring up a higher balance on your new card, thus perpetuating the problem.

To ensure your balance transfer pays off, lay out a roadmap for yourself. Determine how much you need to put toward your balance each month to get it down to zero in a reasonable timeframe. Here are some pointers:

• Pay more than the minimum amount required each month.
• Don’t over-allocate money to debt repayment. If you shortchange yourself for necessities like groceries or rent, you may wind up relying on your card to pay for essentials.
• If you have a card with a promotional rate that will end after a number of months note the date it ends. Try to have most, if not all, of your balance, paid off by the time the standard APR is applied.

Paying down your debt isn’t always easy. However, with the right tools, you may be able to make it a little less painful on yourself. A balance transfer credit card could be the right strategy for you, as long as it saves you money.

Contact us today to learn more about how a balance transfer could positively impact your financial well-being.