Debt Consolidation Through Balance Transfer Cards
Building up credit card debt is extremely easy, especially if you aren’t interested in paying off the balance in full each month. This sort of behavior can get your credit card debt up pretty high, in which case sometimes even a great balance transfer offer can’t help you. Owing multiple credit cards can have the same effect, making getting out of debt much harder than it was to get in debt.
As long as you live within your means, you should be fairly well off. Even if you carry a balance on your cards, as long as those balances do not get unmanageable or out of hand, you won’t have too many financial worries. Still, sometimes a little help can be appreciated, as long as you know where to look for it.
You might have spotted one or two credit card offers in the mail boasting about 0% balance transfers. If you have a credit card with a balance, or multiple cards with several balances, you can use the 0% to your advantage. It can be especially handy if your current APR is less than agreeable and you want to get away from those extra finance charges for a while in order to get your debt back under control.
First you must make sure the 0% APR offer lasts for a significant amount of time. Some balance transfer offers last as little as three months whereas others can continue on for as much as a year. Depending upon the amount you plan to place on this card, double check the promotion period before making any final decisions. Also, look at the APR the card has once the promotion is up. Is it worse or better than your current card? And think; do you plan to use this card for the balance transfer option only, or will you put it to use even after the promotion has ended? Normally, APR amounts for balance transfer cards are quite high, so if you do intend to use the card after the promotion period, it would be wise to pay the card off each month instead of starting up a balance again.
Consider also the amount you plan to put on the card. When you add up the balances you have left on your cards, is the amount painfully large or not so much? Some people may owe $14,000 or even more on multiple cards, whereas others might only add up to $1,000 or less. Generally, the plan for the balance transfer, no matter what amount you have, is to wipe out your debt completely, so before moving any money, since you don’t have to worry about interest, create a payment plan for yourself so you can adequately pay off the balance within the promotion time. Will you be able to make the payments? If you have a large amount and the new card’s APR is much more than your current cards, it is possible that making the move will not make a difference. Be sure to examine everything before opening up a new credit card account.
Making sure you pay your bills on time can be crucial for many balance transfer cards. On time bill payment is important because failure to do so on your new card can lead to very unpleasant results. Some have stipulations that if you make a late payment, the 0% will automatically cease and you will be right back at square one; paying off a balance with interest stuck to it.