As we near the end of the second full week of June there are still consumers who are looking at credit card opportunities that can offer them balance transfers, which could bring about consolidation options for their personal financial needs. Many consumers were drawn into these options earlier in the year when banks started making more credit cards available to certain consumers, which may have been excluded when credit was tight and certain borrowers were being kept from new card opportunities, but one of the popular cards that consumers have begun pursuing are those that offer balance transfers.
While it’s been mentioned repeatedly that one of the main attractions to this type of card comes through introductory rates that certain banks are offering, and have allowed consumers to consolidate debts on these balance transfer cards at little or no interest, consumers do need to be aware of current rates that are being seen and factor it into their plans as to whether they can not only qualify for one of these cards, but what their rate might be when an introductory period ends. Currently, balance transfer cards are reportedly averaging rates of anywhere between 12% to 16%, and of course each lender has their own bells and whistles which they are offering to new cardholders that, once again, may draw more consumers to a particular card that offers balance transfer debt consolidation.
There are consumers who are finding themselves on a better, more stable financial ground and this has led to some looking at opportunities that will allow them to simply get out of debt, and consolidation is often a popular choice when consumers are met with high overall costs on minimum monthly payments. Many consumers see that when they can consolidate their debts they are going to be paying a lower minimum monthly payment and only combating one interest rate, so for many this translates to more affordability.
Yet, no matter if a consumer uses a balanced transfer credit card for debt consolidation or a personal loan to consolidate debt, higher overall costs are usually the result due to the fact that the principal amount that a consumer will pay is much higher and even if a low interest rate is offered this will lead to a longer repayment time period and higher interest costs, in most cases. What many consumers see in these balance transfer cards though, is that if they can consolidate their debts and pay off what they owe within the introductory period, they will be able to erase their debts with little or no interest attached.
While consumers must be cautious of is balance transfer fees, the length of an introductory period, and whether they can pay off this consolidated debt or not. Also, some balance transfer credit cards may require that consumers meet certain qualifications or use their card in a specific way to keep a low introductory balance for the entire timeframe, and this could also lead to consumers being required to make purchases during the introductory period. In theory, balance transfer cards can be helpful in that they will allow a consumer to consolidate debts and pay off this balance at little or no interest, but consumers may face higher interest rates later, could be hit with an excessive amount of fees, or simply may be in a position where alternative debt relief efforts outside of consolidation will be more beneficial for their debt situation, so exploring all avenues of debt relief should be the first step for a consumer looking to pay off multiple creditors.