Consolidating credit card debt can be done through various methods but many consumers are taking advantage of balance transfer credit card options that many financial institutions are currently making available with introductory rates that can be incredibly low or even nonexistent for a set period of time. Understandably, consumers who see that a card is being offered that will allow them to transfer balances onto one credit card source and, as a result of low introductory rates, allow them to pay off this debt without incurring any interest charges, is a draw for many but there are some aspects that consumers must review before entering into a balance transfer card agreement for the purposes of consolidating credit card debt.
Rates on balance transfer cards will vary and, when consumers are looking at these types of cards that would allow a consolidation option, consumers need to look at not only what rate is being offered as an introductory option but what their rate will increase to after this period has ended. As an example, Bankrate.com states that current balance transfer credit card rate averages are around 16.10% while CreditCards.com has this average rate at 12.78%. So, while there are some card offers that are advertising 0% interest as an intro rate, consumers must make sure that they look at what their rate will be afterwards, as some have made the mistake of not paying off the consolidated debt they have on a balance transfer card and, as a result, are stuck with a higher principal amount on their card that is attached to a high interest rate as well.
Yet, essentially this form of credit card debt consolidation can be helpful for some, but there are other aspects that consumers must review before entering into debt consolidation on a balance transfer card. Again, reviewing reputable credit card lenders and the offers that may be available is one of the best starts for consumers who feel a balance transfer card will be in their best interest, but looking in any fees that may be associated with transferring a balance is also necessary as these costs could be quite sizable depending on the card or the amount that a consumer wishes to consolidate. In some cases, a balance transfer credit card will allow consumers to consolidate other forms of debt, but may charge a percentage of the total amount as a fee and this could, again, cause costs to rise if an individual transfers a high amount to this balance transfer card.
While credit cards and, particularly, balance transfer cards are not in every consumer’s best interest no matter how much they want to consolidate their debts and begin paying off what they owe at little or no interest, those who have been successful at using a credit card balance transfer are individuals who have been in a position to erase the total balance transfer debt on their card before their interest rate increases after the introductory period. Yet, consumers must also be wary of provisions that may require them to make a certain amount of purchases on their new card before the low introductory rate remains in place, but again, proper research into not only credit card offers but the ability of a consumer to take advantage of a balance transfer card should help consumers decide whether a balance transfer consolidation option will be in their best interest or if they should explore other debt relief options.