When trying to manage credit card debt, consolidation is often the best solution. Are you a multiple credit cardholder who is trying to pay off your balances from one card to the next? If yes, have you considered getting a balance transfer credit card so you can pay off your debts more easily?
Today, you can find balance transfer credit cards that offer low interest or zero interest rate for new cardholders. Imagine how much you can save by not paying the monthly interest rate from each of your credit card. However, there is more that you need to know about consolidating credit card debt than just finding a low rate card. In this article, let’s discuss why a low APR doesn’t always guarantee a good deal.
Yes, a balance transfer credit card can be an effective tool to get out of credit card debt. However, it’s important to find the right card and use it correctly. Take note that not all credit cards offering a low interest rate is worth keeping. Why do we say this?
Some cards offer an introductory 0% APR for offer 3 months, 6 months, 12 months or even longer. However, as soon as the rate expires, you may find yourself stuck with a card that has an even higher APR than the ones you already have. Thus, it’s very important to know how much the regular interest rate would be when the promo ends.
There are also low interest rate credit cards that get back at their customers by charging hidden costs or expensive fees. Despite the low APR, you may be forced to pay an expensive annual fee to keep your account active. Also, you may be charged with a high balance transfer fee each time you transfer a balance from another credit card.
If you decided to consolidate your debts with a balance transfer credit card, see to it that you will be able to complete your payments while the zero interest rate is still applicable. In addition, zero interest rate cards often require a good to excellent credit rating so it’s best to check your credit report first before submitting your application. Remember that if your application gets declines because of poor credit, you can hurt your credit score even more because of that rejection.