Consumers have various options when it comes to dealing with credit card debt, but many often take advantage of credit card balance transfer opportunities as a way to, essentially, consolidate their various credit cards into one location. While this is not something that is new to the credit card industry, consumers who are struggling financially when it comes to multiple credit card debts are finding balance transfer offers which seem to be their best option, yet financial advisers often worn against these “too good to be true” credit card offers.
At their core, credit card balance transfers are simply a way for consumers to consolidate their debt from various credit cards. Consumers have typically felt that multiple credit card debts, which are attached to various interest rates, are going to be more costly to repay so they turn to these credit card balance transfer opportunities which offer low interest rates or no interest at all for a set period of time, in most cases.
While some credit cardholders have been able to combat various credit card debts one by one and erased their debt in a cost-efficient manner, some use these consolidation practices, like balance transfers, as a way to simplify their credit card debt situation. This has worked for some consumers in the past, as they have been able to focus their payments on only one credit card rather than many, but there are drawbacks to this type of credit card consolidation plan.
Many consumers have found themselves in a bad situation after using a credit card balance transfer simply because interest rates typically will increase drastically after a few months of low introductory interest rate offers. While this is not the case on all types of credit cards were a transfer balance is allowed, consumers who have faced difficulty with a credit card balance transfer situation usually either find themselves in over their head with debt again, thanks to interest, or continue to shift debt around.
Continually moving debt can have negative effects on one’s credit score and, generally speaking, is simply a poor financial practice that costs more over time and can create trouble in one’s financial life. While not all consumers have been unsuccessful with credit card balance transfers, those who were able to pay off their balance before their introductory interest rate increased were the ones who erased their debt without a great deal of difficulty.
Obviously, consumers who are considering credit card balance transfers must read the fine print and do research to find the best offer, if they have come to the conclusion that a credit card balance transfer is right for them. Yet, again, credit card balance transfers have not always been helpful for cardholders, and have even worsened a cardholder’s situation in some cases, so balance transfer consolidation cards are not something that will be helpful for everyone seeking to combat their credit card debt through consolidation.