Debt consolidation loans for credit cards have been used by numerous consumers over the past months as a way to gain better control over various credit card debt obligations. However, there are some consumers who are using credit card balance transfers as a way to consolidate multiple credit card debts onto one card.
While these types of consolidation plans may be similar, they do offer different options in certain cases. Obviously, some credit card balance transfer offers may come with a low interest rate for an introductory period, which can be used to a cardholder’s advantage if they can consolidate their debt and pay off what they owe during this time.
However, debt consolidation loans for credit cards may have a more structured repayment time frame and could come with an affordable monthly payment obligation. While both of these types of credit card consolidation plans do have their benefits, there are some financial advisers who warn against consolidating various debts, especially those associated with credit cards.
Consumers who have used either debt consolidation loans or balance transfer opportunities for their credit card debt over the past months have typically done so because they feel one monthly payment is, obviously, easier than multiple debt payments and they will only be combating one interest rate. However, a higher principle amount on a consolidation loan or balance transfer will take longer to repay, in most cases, and even a small interest rate can cause costs to rise.
There are advisors who feel that, when the opportunity is present, cardholders should structure a repayment plan that will allow them to combat their credit card debts one source at a time, as smaller credit card principal amounts can be easier to erase than one large consolidated principle. However, cardholders who have used either credit card balance transfers or consolidation loans have been those who have feared missing a payment, in most cases, and may have been unconcerned with the overall costs at the present time.
Yet, consumers who are seeking out credit card consolidation or balance transfer options are still being advised to research the overall costs which will be associated with these forms of debt consolidation, as only meeting minimum payments in certain cases can cause a cardholder to pay much more than they would necessarily have to in other instances.