As we near the end of June, there are still cardholders who are researching options like balance transfer credit cards, as this particular type of line of credit has become popular for new card seekers who are looking at various types of opportunities that may be available. It’s been stated that balance transfer credit cards have been helpful for some consumers when it comes to consolidating various debts and rates that are available for new consumers from introductory offers are what happens to be drawing most consumers towards this particular type of credit card opportunity. However, it’s been shown that rates on these cards have remained relatively unchanged as of late, but there are other factors that consumers must still consider when looking at a balance transfer credit card.
Currently, balance transfer credit cards are averaging rates of around 12.7% to 16.05%, which is not necessarily terrible for a consumer who can qualify, but there are factors like introductory rates and balance transfer fees that consumers must take notice of before entering into any type of credit card agreement. Obviously, advisers also suggest that consumers avoid seeking out a balance transfer card strictly for the purposes of consolidating debts, and this should not necessarily be a consumer’s main goal when acquiring a new credit card, as building a credit history or purchasing certain items, which can be affordably paid off quickly, are usually the best uses of any type of credit card for a wide range of consumers.
One of the ways that these balance transfer cards have been used though is by simply consolidating debts from other credit cards or debt obligations which may be charged off by the use of credit. Ideally, consumers who apply for a balance transfer card will receive a low introductory rate or even no interest for a set time and consolidate their debts on this card so that they can begin paying them down without meeting interest fees as well. Yet, there are costs associated with transferring balances in many cases, and this may offset the benefits that some consumers see due to the fact that the amount that it may cost to transfer balances could be comparable to the amount of interest they would have paid if they kept these debts separated.
Consumers must also remember that even though there are low introductory rates or even low advertised rates, as is the case of many average rates on credit cards, the rate that a particular consumer receives will not necessarily be as low as the advertisements would suggest, so looking at this aspect of any credit card, not just a balance transfer card, will be vital because a consumer needs to make sure that, if they have to carry a balance, they will be able to afford the interest costs when doing so. There are consumers who will carry a balance on this type of card while they are paying off their consolidated balance, but also advisers still warn consumers to make sure they read the fine print so that a minimum number of charges or balance is not required in order to keep a low intro rate, as carrying a balance on any credit card can lead to higher overall costs and potential problems for a consumer.