Balance transfer credit cards are being offered as a way to allow consumers to consolidate various debts and, hopefully, bring lower interest rates to cardholders who are in need of a debt consolidation opportunity to avoid missing payments or simply as a way to find more affordability. While balance transfer cards are reportedly averaging an interest rate of 15.96%, according to Bankrate.com, there are numerous offers that cardholders may find which could bring about lower than average interest rates on a balance transfer or a 0% rate as an introductory offer.
Cardholders who are using these balance transfer cards are being offered these introductory rates at such low levels simply because there are more financial institutions who are attempting to ease back into the credit card lending business, as there has been caution in various financial sectors over the past months. Yet, these offers that will bring about more affordability can also allow a consumer to consolidate multiple debts onto this credit card and, in certain situations, erase their debt obligation at either no interest or a low cost.
When it comes to budgeting and repaying debts after using a balance transfer credit card, consumers must be wary of interest rate increases after the introductory period ends or, for those who may find a low interest credit card balance transfer opportunity, simply meeting minimum monthly payments could cause overall costs to increase as well. It’s understandable that there are some consumers who are unconcerned with the overall costs that they must meet as simply getting a more affordable payment from month-to-month is their primary goal so that they may avoid missing payments on debt obligations.
For consumers who can make more than the minimum monthly requirement on a credit card balance transfer, or are only given a set period of time before their introductory rate increases, paying more than is required or budgeting in a way that allows a cardholder to erase their debt faster will obviously be in a cardholder’s best interest as when it comes to any type of debt obligation, erasing this debt as quickly as possible can always be more cost efficient in the long run, as long as there are no penalties for early payment. Yet, looking at more that one balance transfer credit card offer will be necessary so as to avoid signing up for a card that may not be in a consumer’s best interest in terms of their financial goals.