As reports state access to credit cards has become more available for a variety of consumers, from either those in an excellent credit position to subprime borrowers, there are numerous opportunities for acquiring credit that consumers may use, but many have begun taking advantage of low interest credit cards that offer balance transfers as a way to consolidate multiple debts. One of the reasons that consumers will typically consolidate debt through either a personal loan or with these new options for credit cards that offer balance transfers is that they can find either more affordability in their overall payments or as a way to simply lower their monthly payment obligation and avoid becoming delinquent on certain credit card or personal debt obligations.
Typically, consumers who will qualify for low interest credit cards that offer a balance transfer option will need to have a great credit score, despite the fact that there are opportunities for balance transfers with a variety of cardholders who may have anywhere from excellent to bad credit. Yet, when it comes to consumers using low interest credit cards for balance transfer consolidation, there is caution that should be taken even by these borrowers as, according to a CNNMoney.com article, “…card offers usually play up the terms for someone with near-perfect credit,” and these instances could lead some consumers to enter into a credit card agreement that may bring about an interest rate increase over time.
While the CARD Act prevents consumers from falling prey to credit card lenders who will suddenly increase their rate, when it comes to balance transfer credit cards, there is usually a low rate offered, but this opportunity will only remain for an introductory period. Obviously, consumers may be able to take advantage of a balance transfer credit card that will offer a low interest rate throughout an introductory period, and then switch to a higher rate that still may be more affordable, but cardholders across the board must make sure that they look at what potential rate may follow a low introductory period that can offer the option for a balance transfer consolidation.
While Bankrate.com, among other financial sites that track various interest rates, currently reports average rates for low interest cards to be around 10.80% and balance transfer cards to be around 16.10%, these offers are not set in stone and can change after a promotional period has ended or may be higher for some cardholders. Considering these increases is something that must be factored into a cardholder’s decision, but when a borrower who may be able to take advantage of a low interest credit card feels that using a balance transfer option may be one way to consolidate and erase debts as well, there are more aspects of choosing a card that must be considered in this situation.
Obviously, the opportunity for consumers to pay off various debts on a credit card that may have little or no interest rate for an introductory period could lead to a great deal of savings, but no matter what credit position a cardholder is in, consumers must be sure they can erase this debt during the introductory period where their rate will be low and offer affordable balance transfer opportunities. While looking at balance transfer fees, credit card interest rates, and the time it will take to pay off these debts, consumers must also look at their personal situation as well due to the fact that not everyone may qualify for low interest credit card opportunities and, even if balance transfers are available on other card offers, looking at the good and bad aspects of multiple credit card options will be necessary so consumers can find a balance transfer credit card that is right for their situation and will be beneficial if they feel this type of opportunity will be helpful when it comes to erasing debts from their life.