Credit Card Balance Transfer Offers

Marcus by Goldman Sachs: Aims to End Cycle of High-Interest Credit Card Debt

A new service from investment bank Goldman Sachs called “Marcus” aims to help consumers pay off high-interest rate credit card debt once and for all.

The smart-looking website seems to be appealing to today’s youth, with the option to apply for a personal loan both online or via tablet and smartphone without ever speaking to anyone!

Marcus Wants to Pay Off Your Credit Cards

The way it works is simple. You apply for a certain amount of money with Marcus, such as your current amount of outstanding credit card debt, then they provide you with a short-term fixed-rate loan.

For example, say you’ve got $4,000 in credit card debt at a typical interest rate of say 20% that you simply can’t manage to knock out. With Marcus, you could get a loan for that amount at a rate as low as 5.99%.

Marcus has loan terms as short as 24 months and as long as 72 months. If you choose a shorter term you’ll need to make larger monthly payments, but you’ll pay way less interest.

Conversely, if you choose a longer term you’ll pay less each month but more interest over the longer duration of the loan.

In any case, you get to decide on the term, and your credit history will determine the interest rate you qualify for. Yet another reason to practice good credit habits!

Marcus Says No to Fees

Aside from the interest rates being potentially quite low, Marcus also doesn’t charge any fees. There isn’t a sign-up fee, prepayment fee (if you pay off the loan early), or a late fee.

However, if you do pay late you might have to pay additional interest as a result.

The example on their website illustrates the savings you can achieve with Marcus. An individual with $14,000 in credit card debt set at 16.99% APR would pay roughly $20,000 to pay off the full balance.

With Marcus, that same person could pay just over $18,000 thanks to the lower interest rates (12.99% APR in their example) and shorter repayment term (48 months) offered by the company.

You Might Do Even Better with a Balance Transfer

Of course, that same credit cardholder could fare even better with a 0% APR credit card, assuming their credit was good enough to qualify.

While it can be tricky to get approved for credit cards when you already have outstanding credit card debt, a 0% APR credit card for at least a portion of the debt would save the cardholder a lot more.

After all, zero interest for say 12 months would allow the full monthly payment to go entirely toward paying off the debt, less any applicable balance transfer fee.

Look for a no fee balance transfer credit card to avoid that pesky fee and you’re even better off.

So while Marcus might offer better rates than competitors (and the credit card issuers for standard purchase APR), you might want to explore (and exhaust) all your balance transfer options first to save the most money.

Tip: It might also be possible to transfer some of the debt to a 0% APR credit card and the remainder to one of the lower-interest rate loans from a company like Marcus if you can’t balance transfer all of it.