With interest rates rising, consumers are looking for a more cost-effective way to borrow. The rates on many credit cards have been rising as the Federal Reserve hikes interest rates. The average credit card interest rate in the U.S. on September 7, 2022, was 18.7 percent. For millions with credit card debt, this could mean higher bills as the rates increase. If you have a large purchase, here are 3 borrowing options better than a high-rate credit card.
1 Personal Loans
Personal loans provide a lump sum of money at a fixed interest rate that you pay back each month with a set monthly payment until your loan is paid off. A personal loan is a great option for a larger purchase. This is especially true when you consider the average credit card interest rate mentioned above. The personal loan rate may vary among lenders and is also dependent on creditworthiness. For example, Benchmark Federal Credit Union is currently offering members a personal loan rate as low as 9.75%*. That is significantly lower than the average credit card rate.
A personal loan is a good option when your credit history is good, and you can qualify for a low APR. This can make your monthly loan payment more affordable. As mentioned above, with a fixed interest rate you will always be able to budget for your payment. It’s a good way to consolidate higher interest rate debt or make a large purchase. Tap to learn more about a Benchmark FCU personal loan.
2 Home Equity Loans & HELOCs
If you have equity built in your home, you may be able to borrow with a better interest rate than a credit card. Because your home is used as collateral to secure the Home Equity Loan or Home Equity Line of Credit, they typically come with lower APRs than unsecured loans. As an example, Benchmark FCU is offering access to up to 90% of the appraised value of your home in the form of a Home Equity Loan. Tap to view the competitive Fixed Home Equity Loan rates at Benchmark FCU, which start as low as 6.99% APR** Amounts between $10,000 and $250,000 are available depending on equity and credit history, making this an ideal loan for a large purchase or home improvement.
Another option allowing borrowers to tap into the equity of their homes is Benchmark FCUs Ultimate HELOC. This Ultimate Home Equity Line of Credit features a low introductory month rate of 3.99% APR*** Just like a Fixed Home Equity Loan at Benchmark, you can borrow up to 90% of the appraised value of your home on amounts between $10,000 and $250,000 depending on equity and credit history. Two convenient repayment options are available, which include Principal and Interest or Interest Only. Tap to learn more about the payment options.
While you may qualify for a better rate and term with a Home Equity Loan or HELOC, you will need to put your home up as collateral. A Home Equity Loan or HELOC can help a homeowner access cash for home repairs, improvements, or any other need.
3 VISA Platinum Balance Transfer Credit Card
While our point is to provide borrowing options other than a high-rate credit card, a 0% balance transfer card can be a better option for new purchases and also balance transfers. Benchmark FCU is currently offering a VISA Platinum Balance Transfer Credit Card for 0% APR***** on purchases and balance transfers for up to 12 months. If you can pay your balance off during the 0% APR intro-rate period, this can be a great option for your borrowing needs. Tap to learn more about Benchmarks VISA Platinum Balance Transfer Credit Card.
Looking for more ways to save? Read our “7 Tips to Reduce the Impact of Inflation.”
*APR = Annual Percentage Rate. Rates are subject to change, are based on an individual’s credit history, & includes a .25% discount for repayment via Payroll Deduction or Automatic Transfer from a Benchmark Account.
**APR = Annual Percentage Rate. Rates are subject to change & based on an individual’s credit history.
***APR = Annual Percentage Rate. Rates are for qualified borrowers and are subject to change without notice. Introductory rate of 3.99% APR is for the first 6 months. At the end of the introductory term, the rate reverts to rate according to credit score at time of application: as low as Wall Street Journal Prime Rate – .51% for 80% LTV** and Wall Street Journal Prime Rate – .26% for 81-90% LTV****. Floor rate is 3.99% APR. $100 application fee for loans under $25,000. Early termination fee of $250 if HELOC is paid off & closed in the first 12 months. $100 cash bonus for acquiring a new or refinancing a HELOC held at another institution & will be deposited into member’s account after loan closing. Promotional bonus & rate are subject to institution’s discretion & may be discontinued without prior notice.
****LTV = Loan to Value
***** *APR = Annual Percentage Rate. Rate subject to change & based on an individual’s credit history. 0% Intro Rate is valid for purchases & balance transfer from other institutions for 365 days from card opening. The 0% rate will be in effect for up to 12 months from card opening & after 12 months the rate on all unpaid balances will convert to the rate member qualified for at card opening. 0% APR promotional rate is only valid on new VISA® Platinum Cards & subject to expire without prior notice.