Consumers may be finding that balance transfer credit card options are becoming more available and low introductory rates have many considering consolidating various credit card debts onto one, low interest card in the hopes of quickly erasing these debts with little or no interest. Ideally, cardholders who have used balance transfer card opportunities as a way to consolidate and erase multiple debts will have an introductory period where they may have a small interest rate or no interest at all, which can be helpful if cardholders focus on erasing these debts associated with a balance transfer card and paying down the majority or entirety of these debts before the interest rate on their balance transfer card increases.
While it will depend on a cardholder’s situation, credit score, and in some cases their credit history as to whether a balance transfer card will be offered with a low introductory rate, according to Bankrate.com, the average interest rate on balance transfer cards at the present time is around 15.95%, but again this will differ from one credit card lender to another as some cards offer a 0% interest introductory period. Yet, consumers have been able to use balance transfer cards as a way to put themselves in a better financial position when multiple credit card debts are in place.
Consumers who are paying on various credit card debts are obviously combating multiple interest rates and in spite of the fact that there are ways which some advisers suggest can help erase multiple debts without consolidation, some consumers may be in the position to benefit from a balance transfer if a low interest rate is offered and the introductory period for this rate will give the cardholder enough time to pay off what they owe. Yet, simply looking at a credit card’s introductory rate is not the only factor that needs to be considered when cardholders are researching balance transfer credit card options, but what interest rate will be offered after the introductory periods interest rate has expired.
The CARD Act has prevented banks from suddenly increasing interest rates and, as a result, there are those who feel that current high interest rates on new credit card offers are the result of these banks looking to make up for losses they have sustained by new rules being put in place for credit card interest rate increases. While credit card lenders can increase interest rates on credit cards, they do have to give cardholders a warning and, as a result, many cardholders have either been carefully watching their credit card habits or if any rate increase is on the horizon, cardholders may use these balance transfer options or simply pay down debts on the card whose rate is about to increase.
While proper credit card use is vital no matter what type of card or situation a consumer may be in, those who may not have an insurmountable amount of credit card debt but can benefit from a balance transfer credit card and erase these debts could put cardholders in a better position at getting out of debt at a lower overall cost. However, consumers who are considering a credit card balance transfer to consolidate various credit card debts need to not only look into balance transfer card interest rates, but the future rate increases after an introductory period may have ended and fees that may be associated with balance transfers as well.