Balance transfer consolidation cards have been seeing steady rates on average over the past few weeks, as many consumers continue to look for ways to address debt issues or even take advantage of new lines of credit that may be open and helpful in their financial life. While getting a credit card should not be a decision that any consumer takes lightly, there are a great number of credit card offers currently in place that may bring different benefits and perks which are all attracting the attention of many consumers, particularly those who are in the market for credit card for the purposes of establishing their credit history or for personal use.
Yet, balance transfer cards have often been sought out throughout 2011 as a way to consolidate debts onto a credit card with the hope that low interest rates or even no interest will come with an introductory offer and allow the consumer to pay off what they owe without any of these interest rate charges. Even though this task has been accomplished by some, there are aspects of balance transfer cards that many new consumers overlook and, as a result, financial professionals are stressing that consumers make strides to understand what a particular balance credit card will entail in terms of cost and repayment, and how it will impact the consumer’s financial life.
Here in mid-September we are seeing average rates on balance transfer credit cards holding steady at around 12% to 16%, but the card offers are coming from various lenders that may have different agreements which could be good or bad depending on a consumer’s situation. Obviously, if a consumer is looking for this credit card simply because they want to consolidate debts, low introductory rates and an affordable interest rate in the long run could make a balance transfer credit card useful for not only debt relief but as a way for a consumer to responsibly make purchases.
Yet, consumers do need to remember that balance transfer cards often come with fees and charges that are associated with transferring multiple balances may outweigh any benefits or savings that a consumer feels will come from using a balance transfer card that offers little or no interest up front, and ideally would allow a consumer to pay off what they owe at a much lower cost. As an example, some consumers have seen these balance transfer cards offering no interest rate for a set period of time, during which a consumer realizes that they may be able to pay off their consolidated balance on this card and not have to meet any costs beyond the principle amount.
However, there are some cards that may charge a fee, which could be a percentage of the total amount transferred or require that consumers make purchases on this balance transfer card, both of which could make paying off this debt either more difficult or more expensive than previously thought. While rates on these cards are still relatively low and seem to be holding steady, consumers must read the fine print on balance transfer credit cards, particularly if their primarily seeking out these cards for the purposes of consolidation, as it will not always be in a consumer’s best financial interest to use this route when it comes to paying off debts and before consumers make a personal choice as to whether they will use one of these cards or not, they need to have as much information as possible to make an informed decision.