Balance Transfer Credit Cards: A Way to Consolidate Debt

Balance Transfer Credit Cards: A Way to Consolidate Debt
Credit card debt is a fact of life for millions of
Americans. Once you have credit card debt racked up, it can
be difficult to get rid of. Balance transfer credit cards
provide a solution to this problem. By understanding how
they work, you can use balance transfer credit cards to
help you get out of debt.

How Balance Transfer Credit Cards Work

Balance transfer credit cards allow you to transfer the
amount due on other credit cards to their card. Many offer
a low interest rate or a 0% APR introductory rate on the
transferred amount. This way, you can avoid paying hundreds
of dollars on interest. By making payments each month, you
reduce the balance and save on interest expense.

Understand the Fees

Balance transfer credit cards come in many shapes and
sizes. Some charge a fee to transfer balances; others do
not. Some offer low interest rates for a certain period of
time; others allow a fixed low interest rate on the balance
until it is paid off. Certain balance transfer credit cards
come with a rewards program or additional perks. While
balance transfer credit cards offer a great rate on the
initial transfer, some include a high interest rate on new
purchases. The payments you make will first be applied
toward finance charges, then the transferred amount, and
finally the new purchases. Your best bet is to find a
balance transfer credit card that offers 0% APR on new
purchases for the length of the promotional period. You may
be surprised at how may credit card issuers are offering 0%
APR on both the balance transfers as well as on new
purchases for up to 12 months.

Study your Finances

Before you apply for a balance transfer credit card, be
sure that you understand your financial situation. Look
through your credit cards and the interest rates on them.
If you are carrying balances with high interest rates, you
may be spending hundreds of dollars each month on interest.
It could take years to pay off the initial amounts placed
on the cards. By transferring the balances to a credit card
with a low interest rate, you can pay off the amounts
faster. Also, balance transfer credit cards allow you to
consolidate your debt. Keep in mind that some balance
transfer credit cards only offer a low interest rate for a
certain period of time. Many cards have a high interest
rate or variable interest rate that kicks in after six
months or a year. If you haven't paid off the balance by
then, the higher interest will continue to increase your
debt and work against you. If at all possible, you will
want to pay off the credit card debt that you transfer
within the grace period.

Transfer Away

After you have done your research and understand your
finances, you are ready to apply online for a balance
transfer credit card. Pick one that suits your needs. Then
set up a system to pay off the balance. Balance transfer
credit cards can provide the first step toward getting out
of credit card debt. By placing all of your credit card
debt in one place, you can make just one easy payment each
month. You also will be able to enjoy paying 0% interest
for a period of time on your balances. With a little
planning, you will soon be on the road to zero credit card
debt and good money management.

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Click the following link to find Balance Transfer Credit
Cards
http://www.credit-card-surplus.com/balancetransfer.php . Ed
Vegliante runs http://www.credit-card-surplus.com , a
directory helping consumers to compare and apply for credit
cards.