Consumers who are looking to consolidate unsecured credit card debts, or a mixture of credit card debt and other personal debts, may have consolidation loan opportunities which will allow this to take place in the hopes of finding more affordability in their monthly payment obligation, but balance transfer credit cards have also offered an alternative for consumers who are looking for debt consolidation. Consumers who turn to credit card balance transfer offers usually can get an affordable introductory rate, which may help make repaying multiple debts more affordable for those who are having trouble repaying their debts from month to month.
Obviously, many individuals are drawn to these credit card offers due to the fact that they usually offer a 0% interest for an introductory period and, as a result, consumers who transfer multiple credit card balances or various debts onto this card can begin erasing these debts from month to month without worrying about interest charges. Many consumers have used this timeframe to either completely erase their debt or substantially lower their overall debt obligation and, thanks to paying no interest charges, have done so at a lower overall cost.
Yet, consumers must be cautious against using debt consolidation through credit card balance transfer options due to the fact that the introductory period with 0% interest or a low interest rate will end eventually and if a consumer has not made efforts to reduce the total principal on their balance transfer card, they may end up paying more over time due to interest and a higher principle amount which will require a longer repayment time frame.
Also, there have been reports that credit card balance transfer offers are becoming more popular as many banks have severely cut down on these offers in previous years. However, despite the fact that many balance transfer options may be returning, there are changes that consumers need to be aware of which could affect the amount they must pay on their balance transfer. Reports have indicated that the fees which are charged for cardholders to transfer balances onto this card may now run at a higher percentage and there may also be no cap on the total fee they may be charged.
However, consumers may be able to meet these fees on their credit card balance transfer option and still find overall lower costs associated with erasing their debt through this form of consolidation. While credit card balance transfers are one alternative to debt consolidation loans, they do require that the cardholder make responsible financial decisions as transferring balances on multiple cards onto one credit card does not erase their debt and for consumers who use a balance transfer credit card this does not mean that debt on other cards may be acquired once again.
Cardholders who have responsibly used these balance transfer options have, again, typically taken advantage of low interest rate on this card, transferred balances of other debts, and begun focusing heavily on erasing the principal amount on this new credit card before a higher interest rate kicks in. While this may not be an option for every cardholder, proper research and comparison coupled with intelligent budgeting habits can lead to this debt consolidation loan alternative greatly helping a consumer improve their debt position.