Consumers who may have bad credit debt in their life often find that, if financial trouble arises, it can be difficult to combat these debts as options like a traditional debt consolidation loan may be unavailable. However, some consumers turn to credit cards as a way to consolidate bad credit debt with the use of credit cards for bad credit and poor credit borrowers that will allow the option for a balance transfer. In many cases, these cards can be more affordable for some consumers as the monthly payment they must meet on this consolidated debt could be lower than the total payments met when debts were separate, but advisors typically counsel cardholders to weigh a few factors before choosing a bad credit credit card consolidation option.
According to resources like Bankrate.com, many of the credit cards that may be offered for bad credit borrowers hold rates around 7.9% to 22.9% or higher, when it comes to bad credit credit cards that will offer a balance transfer option. However, a consumer’s particular interest rate will obviously vary from one to another, so looking at what offers may be available for a cardholder’s situation must be researched before using a bad credit credit card to consolidate various debts. It’s understandable when consumers turn to these consolidation options as a way to lower their monthly payments, but even if an affordable monthly payment is available on a particular bad credit credit card that offers debt consolidation, the interest might cause the overall costs a consumer must pay to skyrocket.
Also, since many bad credit credit cards may not offer a balance transfer option, there are some cards that may offer an incredibly low introductory rate, even for borrowers who have less than perfect credit, and a consumer may choose this particular card to transfer balances of other forms of debt, but after the intro period expires, they may see a sharp rise in the interest rate on their new card. Looking at not only current rates but future rates as well and, if they are available, comparing fixed rate and variable rate credit cards can also be helpful for consumers who are in a financial position where they are looking to consolidate multiple bad credit debts.
Consumers in need of bad credit debt consolidation options must also look at any fees associated with credit cards that may allow this debt consolidation process as, for some card lenders, there will be a fee levied against balance transfers, and this may be particularly true for bad credit borrowers who are looking for these types of cards which will offer the balance transfer option they need.
While, having various bad credit debts can be problematic, consumers may also want to look outside of balance transfer credit card options to explore debt consolidation opportunities that may be available. Some consumers may be able to use a secured loan as a way to consolidate debt, which could offer more affordability and a lower interest rate, but of course if a consumer uses their mortgage to secure this loan, failure to pay could result in further financial distress and the loss of one’s home. Bad credit debt is made worse when a consumer is also having trouble repaying the debt, but if a consolidation option does arise in the life of a particular individual, researching factors like minimum monthly payments, interest rates and the overall interest charges that will be paid, and looking at fees or charges that may be incurred when consolidating will all be necessary to help consumers not only find a bad credit debt consolidation option that can be beneficial for their situation but also a program which will help them erase their debt at as low of a cost as possible.