Posted on September 3, 2019. Last Updated: April 29, 2025
How to simplify your debts and maximize your savings
The best way to manage high-interest credit card debt is by better understanding the options for avoiding it. Consolidating debt is a popular choice because making small changes to your debt arrangements now can make large changes in your payment potential going forward. The first step is to review your current situation, including the rates you’re paying, to see if it makes sense to transfer or consolidate your high-interest debt balances to a single credit card, with a lower annual percentage rate (APR), to save yourself money in the long term.
Not all credit card debt is the same
Like all loan products, credit card terms and rates can range widely from card to card, including annual percentage rates (APRs), annual fees, repayment conditions, and borrowing limits. It’s important to be in-the-know about each of your loan and credit card’s current interest rates, and how they measure up to the rates of other financial institutions and loan products.
- Real-world example: For a credit card with a $5,000 balance, the difference between a 20% APR and a 29% APR is a $1,133 difference in debt, you’re paying over a thousand dollars difference in interest alone. Therefore, it may be beneficial to transfer the balance from the higher interest rate cards to a lower interest rate card, especially if your interest rate is overwhelming your ability to make payments.
When to consider a balance transfer
Shifting debt into a lower-interest account sooner than later can help you pay off your balances faster as the interest accrues at a lesser rate. Furthermore, credit card companies will often promote zero-interest balance transfer offers, meaning you won’t pay interest on balance transfers for a specific period of time. Transferring high-rate debt and locking in 0% APR can put a significant amount of money back in your wallet and give you more financial freedom.
If a low credit score affects your ability to obtain housing, jobs, or other essential services, consolidating balances may help. Credit rating companies look for money management skills, which can include consolidating balances to make payments more manageable. Making more on time payments, lowering your credit card utilization rate, and decreasing your debt can dramatically help your credit score in the long run.
If a low credit score affects your ability to obtain housing, jobs, or other essential services, consolidating balances may help. Credit rating companies look for money management skills, which can include consolidating balances to make payments more manageable. Making more on time payments, lowering your credit card utilization rate, and decreasing your debt can dramatically help your credit score in the long run.
Consider the fees
Some cards will charge a balance transfer fee to make the switch. You should consider all the terms together and see if a program that includes a transfer fee makes sense for your situation. The fees may be worthwhile to get the rate you want, but with some transfer fees, you end up paying more over the long run.
To learn more about consolidating your credit card debt, or transferring high-interest credit card balances, apply online or contact
a KEMBA Member Service Representative at 800.282.6420, option 2.
KEMBA Financial Credit Union is here to help
KEMBA offers the Visa Platinum with Rewards Credit Card, designed specifically for consumers looking to, earn cashback, experience lower interest rates, and take advantage of balance transfer opportunities to put themselves in a better financial position. Review our website for current credit card and balance transfer offers that can help you pay down your debt faster, and save more, including a secondary card that pays more cash back and offers more exclusive perks!
To learn more about consolidating your credit card debt, or transferring high-interest credit card balances, apply online or contact