Many consumers looking for a way to pay off their credit cards often use a credit card consolidation option through the use of balance transfer opportunities that may be on certain cards they may either currently have or currently qualify for. However, this popular method of dealing with credit card debt with the use of credit cards is something that some consumers feel may be more beneficial for their situation as loans associated with debt consolidation will obviously come with an interest rate that will cause overall costs to be higher, while some credit card offers may allow for either a lower interest rate on these consolidation options or no interest rate at all for a set period of time.
Yet, we have recently seen some consumers both benefit and hurt by these options as there are consumers who simply do not focus on what is required for this particular type of debt consolidation to take place. As an example, there are numerous cards currently being advertised as card lenders are beginning to ease back into the credit card arena in the hopes of drawing in more consumers who may have previously walked away from credit cards or may not have necessarily qualified due to tight lending practices. In some cases, these credit cards offer balance transfer options and may also allow for a balance transfer to take place where little or no interest will be offered on these transfers for anywhere between a few months to a year.
While there are credit cards specifically marketed as a balance transfer card, there are a variety of credit cards that may offer a balance transfer option, but of course it will depend on the type of card, the consumer’s situation, and the lender as to whether these balance transfer options will require a fee, will allow a consumer to forgo interest rate payments for a set period of time, or will even be offered to certain men and women. What needs to be remembered though is that even if a balance transfer card could potentially allow a consumer to pay off other credit card debts through debt consolidation and at a much lower cost, consumers may not qualify or benefit from this opportunity.
Also, there are consumers who simply cannot handle the responsibility that comes with using a balance transfer option due to the fact that if they clear the debt off of other cards and consolidate onto a new or existing card, some have made the mistake of beginning to use those old cards to acquire even further debt, which is simply a bad financial practice altogether. Consumers who have benefited from these balance transfer consolidation plans are those who have focused on paying off this consolidated debt, which again may come with an affordable interest rate or no interest charges at all, in a timeframe that will allow them erase this debt before any rate increases or higher charges occur.
The decision as to whether these cards will be helpful for a personal consumer’s situation will fall squarely on the shoulders of a cardholder, but consumers do need to understand that there are both benefits and drawbacks to these particular balance transfer options and need to look at how these balance transfer opportunities will impact their particular situation, ability to repay their debts, and whether they are looking to transfer balances onto one card as a way to find debt relief once and for all or if they may plan to use other cards after the consolidation to continue to acquire debt. It goes without saying that simply consolidating to pay off debts and strengthen one’s financial position can be helpful but if consumers are looking to free up cards so that they can acquire more debt, this will obviously be a dangerous practice in the life of a consumer.