Consumers who have multiple credit card debts may find options for consolidating through balance transfer credit cards, as there are many new options that may be available to help consumers consolidate credit card debts onto one card and, as is the case with many lenders, this could be done with a low interest rate or at no interest for an introductory period. However, consumers may still not fully understand how consolidation could lead to more financial trouble down the road, and as a result, advisors often point out that there are different repayment options that can lower the overall interest rate costs that a consumer must meet if they are consolidating.
While financial websites that track various credit cards like Bankrate.com and CreditCards.com put APRs of these cards at anywhere from between 10.99% and 20.99% or higher, it obviously will depend on a cardholder’s personal financial position as to what we they may get if they are seeking one of these balance transfer credit cards. However, what has drawn many consumers in over the past months is the fact that many banks are offering 0% interest for a set period of time on credit cards that offer these balance transfer opportunities, and while some may charge fees for a balance transfer, others have also waved this cost in the hopes of drawing more consumers in.
Yet, when it comes to repayment options that can lower the interest rate costs on these cards, consumers must take care to look at their card’s fine print, after they have compared various options that may offer them a balance transfer opportunity. Obviously, consumers who may be able to consolidate multiple credit card debts onto one card where 0% interest is in place would greatly benefit if they can erase this debt in a timely manner. It’s factors such as this that consumers must look at before choosing a card or even consolidating credit card debt through a balance transfer altogether, as some cards may require that a consumer make purchases throughout the year in order to keep the 0% introductory rate, or in some instances, the intro rate that offers this low APR may only be for a short period of time.
As with any consolidation loan, if a consumer can meet more than the minimum requirement on their obligation, and provided there are no penalties for paying early, this can help them erase their debt faster and at lower overall cost. Consumers who may have a substantial amount of time with a balance transfer credit card at a 0% introductory rate may be able to simply pay off this consolidation at no interest, but in cases where a high amount of debts are in place, consumers must make sure that they can meet the timeframe associated with the low interest rate on their card.
Obviously, these options are quite attractive to consumers, but advisors do counsel these individuals to be cautious when it comes to any fees that may be associated with a balance transfer, provisions that must be met to keep a low introductory rate, and the timeframe it will take to erase this consolidated debt obligation versus the length of a low introductory rate period, as failing to consider these aspects of a balance transfer credit card could result in financial trouble down the road.