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- Using a balance transfer credit card from a credit union can more quickly reduce your debt because these cards often charge a lower APR, saving you money on total interest paid.
- Balance transfer cards offered by credit unions commonly offer the best deals and terms, often including no balance transfer fees.
- These cards come with multiple benefits, such as the ability to combine your payments, reduce overall interest costs and enjoy a more favorable and rewarding credit card experience.
When you want to consolidate credit card debts into a simple single payment and pay less interest overall, it’s smart to check out a balance transfer credit card. This preferred plastic can save you money while offering other perks, such as point or cash rewards.
Among the most commonly recommended balance transfer credit cards are those offered by credit unions. Find out more about the advantages of balance transfer credit cards, why credit unions can be a wise choice for balance transfers and the best credit union cards with no balance transfer fees — all covered in this article.
Benefits of a balance transfer credit card
Many people seek out balance transfer credit cards primarily for the opportunity to benefit from a low or even 0 percent introductory interest rate at the beginning. This allows them to transfer high-interest debt to the new card, reducing overall interest expenses and speeding up debt repayment. This type of 0 percent intro APR typically lasts for around 12 to 21 months.
Another advantage of using a balance transfer card is that you can combine multiple credit card debts into one, making it easier to manage your finances. With just one monthly payment to worry about, it’s simpler to keep track of due dates and avoid missing payments.
There’s an added bonus: Transferring your balance to the right card can also help improve your credit score. By reducing your credit utilization ratio (the percentage of your total available credit that you’re using), your credit score may get a boost. High credit utilization can negatively impact your score, but a balance transfer card can help lower this ratio, leading to potential credit score improvement.
Moreover, the balance transfer credit card you choose might offer more than just a relatively low APR. Additional benefits like cash back, points or discounts could be included, making the card even more appealing.
Why credit unions can be a good choice for balance transfers
Eager to apply for a balance transfer credit card? While you can start with traditional banks or household name credit card issuers, it’s also a good idea to consider applying with a local or online credit union.
“Credit unions are nonprofit institutions that are member-owned and focused on the individual versus the structure of a bank, which has an institutional focus,” says Cyndie Martini, CEO/founder of Member Access Processing (MAP), the nation’s largest aggregator of visa card services for credit unions. “As a result, credit unions take on fewer risks while serving individuals and small businesses rather than primarily large investors, like a bank. This can give members a sense of security and trust.”
Ray Lindley, chief operating officer for Elevations Credit Union in Boulder, Colorado, agrees. “Credit unions are not positioned to profit from the debts their members carry,” he says. “They are dedicated to helping their members improve their financial well-being.”
Credit unions can be an excellent option for balance transfers because their credit cards generally have low or no fees, according to Ashley Duke, marketing manager for Georgia’s Own Credit Union. “Some credit unions may charge a balance transfer fee, but others offer promotions that waive the fee,” she says. “Additionally, the interest rates are generally lower than those charged by banks.”
Say you have a credit card balance of $8,000 at 24 percent APR with a minimum payment of $238 due each month. In this scenario, it would take you 39 months to pay off the balance, and you will fork over $1,436 in interest and fees.
“But if you transfer that balance to a credit union credit card that offers 0 percent APR for 12 months with no annual fee and no balance transfer fee, it will only take you 29 months to pay off your debt, plus $606 in interest. That equals around 42 percent in savings on interest by transferring a balance,” Duke continues.
James Allen, a certified public accountant and certified financial planner, compares credit unions to a local farmers’ market when it comes to balance transfers.
“They often offer better deals than big chains. They’re member-owned, so they are more likely to offer lower interest rates. It’s like buying apples for $2 per pound instead of $3,” he says.
In fact, the national average interest rate for a credit card from a credit union is 11.96 percent versus 13.34 percent at banks, per the NCUA.
“Plus, credit unions often have more lenient credit requirements, so even if your credit score is not perfect, you might still qualify for their card,” Allen says.
How to shop for the best credit union card with no balance transfer fees
- Choose a credit union that’s relatively easy to join. Membership is required to use credit unions, and eligibility criteria must be met to access their services and products — including the credit cards they offer. But the good news is that joining is usually easy, often requiring just a $5 deposit into a savings account. However, be aware that some of the most generous credit union credit cards require military membership or a certain credit score to join.
- Look for cards with no annual, balance transfer, foreign transaction or cash advance fees.
- Pay attention to the fine print if a low or 0 percent intro APR is offered. “Some cards only offer 0 percent for six months, while others extend this period for much longer,” says Duke.
- Learn what the APR will be once the low or 0 percent intro APR ends, and if (and to what extent) that APR is variable.
- Aim to have a plan to pay off your debt before the promotional period ends.
- Pick a card offering generous perks, including cash back or points.
Best credit union cards for balance transfers
Ready to get started? The following credit union credit cards may be a good choice.
Navy Federal More Rewards American Express Card: Best for military members
The Navy Federal More Rewards American Express® Card* not only offers generally low interest rates, but it also lets you earn 3X points on groceries, dining, gas and transit, covering essential spending areas for most Americans. It also comes with valuable long-term perks, like no annual, balance transfer, foreign transaction or cash advance fees, making it more advantageous than many other rewards cards. Additionally, you get benefits like travel and car rental discounts, purchase protections and roadside assistance, making it an excellent card for everyday spending.
To get this card, however, you must be eligible for membership in the Navy Federal Credit Union, which is limited to members of the armed forces, Department of Defense employees and their families.
Titanium Rewards Visa Signature Card: Best for high credit limits
The Titanium Rewards Visa® Signature Card from Andrews Federal Credit Union* offers a low variable APR, along with cash back rewards. The credit limit can be substantial, ranging from $5,000 to $50,000. If you frequently spend a lot on groceries and gas, this card can be highly beneficial, as it provides unlimited 3X points in these categories and 1.5X points on all other purchases. You can even earn a 10,000-point welcome bonus when you spend $1,500 made within the first 90 days of card opening. The card requires no annual fee or foreign transaction fees, but there is currently a low fee charge for balance transfers.
Membership in this credit union is open to active or retired U.S. military members and their family/household members. Additionally, those living, working, attending school or worshiping in Washington, D.C. — or who are employed by or a member of one of their eligible employer groups — can also join. Another option is becoming a member of the American Consumer Council by using a major consumer product or service and paying an $8 fee to join.
DCU Visa Platinum Signature Credit Card: Best for broad eligibility
The DCU Visa® Platinum Secured Credit Card* is a worthy choice that offers an APR as low as 16.50 percent. Additionally, it comes with no annual, balance transfer, foreign transaction or cash advance fees. But you do need to make a minimum deposit of $500 as a security deposit to get this card.
To become a member of the Digital Federal Credit Union (DCU), you’ll need to work for an eligible employer; live, work, worship or attend school in an eligible community; or be a member of a participating organization. Another easy way to join is by becoming a member of Reach Out for Schools, a nonprofit organization with a yearly annual membership fee of $10.
The bottom line
Joining a credit union and applying for one of its balance transfer credit cards can be a great way to consolidate higher-interest debt from other credit cards and pay less total interest overall. But it’s best to shop around among credit unions to determine if the costs and requirements involved with joining outweigh the benefits of membership and the perks of no balance transfer fee cards they offer.
“Every credit union should have multiple cards to choose from,” says Lindley. “The most important thing is ensuring it’s the right card to fit your needs.”
*The information about the Navy Federal More Rewards American Express® Card, Titanium Rewards Visa® Signature Card from Andrews Federal Credit Union and DCU Visa® Platinum Secured Credit Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the issuer