Nonprofit COVID-19 Financial Hack — The Credit Card Balance Transfer
If a loss of revenue due to the pandemic is making it difficult for you to pay off your current credit card balances, a “balance transfer” credit card might help. (It might help your volunteers and staff, too.)
Typically, the issuer of such cards offers a period of time – a year or longer — in which no interest will be charged on the balance you transfer. The trade-off is that the new card issuer will charge either a fee (usually 3-5% of the balance being transferred) or a dollar amount, to accept the transfer, so make sure that charge is less than the interest you currently are paying.
Look at your current credit accounts, and identify the balances that carry the most interest. Be sure to include those in your transfer. Shop for the best deal. (Here is one Website where you can compare balance transfer cards.) Your comparison should include whether not an annual fee will be charged at some point, reward program features, etc. Also, if you contact customer service, you might be able to negotiate the transfer fee.
Because approval can take a few weeks, it’s best to apply for the balance transfer card immediately after making a payment on your existing accounts. You can expect that your credit score will drop after the transfer, because the average age of your credit accounts will have dropped. However, when you begin to catch up on your payments during that interest-free period, the score should climb again.
Want more tips on stretching your budget and saving? Try The Simple Dollar.
Also, if your revenues and payroll have dropped during the pandemic, you can reduce your insurance premiums now, rather than waiting for the audit following the policy period. We covered this topic in another blog post in March.
About VIS
Volunteers Insurance Service Association, Inc. (VIS) was established in 1972 for the purpose of providing insurance and risk management services for volunteer-based organizations. In addition to still providing these insurance services today on a nationwide scale, we have expanded to provide noninsurance resources for members to manage their risks and improve their operations. By transferring the volunteer risk exposure to our program, we can help you protect your organization. Contact us today at (800) 222-8920 for more information on our programs and services. Join now!
