Consolidating debt for consumers has been one route that some are using as a way to get a more affordable payment on certain debts, but the debate over whether consolidating is right for consumers continues as there are those who argue against consolidating debt, even if an affordable interest rates on debt consolidation loan, for example, is available. Yet, things that we have seen in the area of balance transfer opportunities that may help consumers take advantage of consolidation has led to some using these credit cards as a way to consolidate multiple debt obligations but at a low or even 0% interest rate over the past few months, as introductory offers are becoming more attractive to some consumers looking for ways to lower debt relief costs.
However, cards that are simply billed as balance transfer credit cards are not the only option that some consumers have when it comes to consolidating debt, but this is where many officials have been cautioning consumers over the past few months as these options are not always going to be best for a particular consumer and their debt relief pursuits. Currently, we see that the interest rates on these balance transfer credit cards have remained around 12% to 16%, but cards that are termed as anything from low interest cards to cash back credit cards sometimes offer one of these balance transfer options which may help some consumers who are looking to consolidate without the need of signing up for a new credit card.
The problem that has arisen is that this type of balance transfer option on credit cards that may already be in place will, in the majority of cases, not offer special deals for new cardholders or credit cardholders when it comes to consolidating these debts. What this means is that consumers are in a position where they will be paying interest on this consolidated debt, which brings us back to the argument that some financial advisers make concerning the unhelpful nature of certain types of debt consolidation programs. Obviously, we have seen issues in the past where consumers calculate the overall costs they will pay on their debts separately versus the interest rate in fees on these balance transfer options, and some have found that with specific types of repayment strategies, they do stand to benefit from consolidation.
Consumers are urged to remember though, consolidation in this manner is not always going to be best for their financial situation, particularly when it comes to overall costs that will be paid on a debt consolidation repayment plan. Recently, consumers are seeing further troubles in areas of their financial life as there are reports that home loan delinquencies are on the rise and, in terms of personal loans, some consumers are seeing increases in delinquencies in these areas as well and this has obviously lead to consumers seek more opportunities for affordability, which may be why some are attracted to offers for these low interest or no interest balance transfer cards.
However, consumers who are struggling to make their repayments on personal debts do have options beyond balance transfer consolidations or even traditional consolidation loans, and while it may require that some seek out professional help from a credit counselor or adviser, consumers do have the opportunity to potentially benefit from other debt relief plans and strategies, which is why some officials are prompting consumers to avoid jumping into the debt consolidation arena through either loans or credit card balance transfers before they have looked into these alternative plans, as delinquencies continuing to rise in various areas of consumer financing may be pointing to financial distress in the lives of consumers, but this does not always indicate that consolidation will be the best solution.