Many consumers are aware of the benefits that can come with a balance transfer credit card and for this reason there have been men women seeking out this particular line of credit here in July and earlier throughout the year as well due to the fact that there are options for consolidation and more affordability when it comes to paying off debts that can come from this type of credit card and the balance transfer offer that it brings. However, what officials want consumers to know is that there are some aspects to balance transfer credit cards that need to be understood as some financial institutions may be cutting back on benefits or perks that these cards once offered and as a result it may not be in the consumer’s best interest to use this type of credit card.
Obviously, factors like fees are one of the main areas where consumers must be cautious when looking at credit cards that offer a balance transfer option as there are some consumers who may have to pay a hefty amount if they transfer a large balance and, as a result of this fee, some of the benefits may be negated on this card depending on the introductory rate that a consumer receives, the length of time it takes them to repay their debt, and the total overall costs that they may have to pay. Understandably, cardholders will get different rates depending on their financial position, but some of the average rates that are being reported at the present time on these cards stand around 12% to 16% or more.
Yet, what most cardholders use this particular card for is consolidating debts at a lower overall cost as, once again, in the past these types of cards have offered low or 0% introductory rates which can be beneficial for a consumer if they have a high amount of debt that could take a while to pay off, but can qualify for this card and use this balance transfer option as a way to pay down these debts at no interest or little cost.
However, some cardholders need to remember that not everyone will qualify for these particular types of cards, as some banks may be more strict with their lending practices than others, but even if a consumer is in a position to qualify for a balance transfer credit card and get an affordable rate, as well as, affordable fees for transferring balances, this does not mean that a balance transfer card will be in everyone’s best financial interest. Many officials have repeatedly mentioned over the months that cardholders must make sure that there are no requirements that must be met which could add it to their balance transfer debt on this card, as some cards may require a minimum amount of purchases be made before a low rate stays in place.
Looking over these aspects of the balance transfer card will help consumers be more educated in terms of how this card can be helpful, but in cases where cardholders may be unable to pay off the total transfer balance on the card during a time where low interest rates are in place, this could also cause some increases in the overall cost that they may pay when all is said and done. It’s because of these factors that cardholders must look at their personal situation, offers for these particular credit cards that are available, and even explore alternatives and debt relief assistance plans to help them get out of debt without using a balance transfer card, and for some this may require seeking a financial professional like a credit counselor. While there are consumers who have benefited from these balance transfer options, drawbacks to these particular types of cards could put some cardholders in a worse financial position if caution is not taken, so whether or not to use a balance transfer card is going to be a personal decision that the cardholder must make and it should not be done without a great deal of research and thought beforehand.