Low Interest Consumer Credit Cards And Balance Transfer Offers For ...
As reports state access to credit cards has become more available for a variety of consumers, from either those in an excellent credit position to subprime borrowers, there are numerous opportunities for acquiring credit that consumers may use, but many have begun taking advantage of low interest credit cards that offer balance transfers as a way to consolidate multiple debts. One of the reasons that consumers will typically consolidate debt through either a personal loan or with these new options for credit cards that offer balance transfers is that they can find either more affordability in their overall payments or as a way to simply lower their monthly payment obligation and avoid becoming delinquent on certain credit card or personal debt obligations.
Typically, consumers who will qualify for low interest credit cards that offer a balance transfer option will need to have a great credit score, despite the fact that there are opportunities for balance transfers with a variety of cardholders who may have anywhere from excellent to bad credit. Yet, when it comes to consumers using low interest credit cards for balance transfer consolidation, there is caution that should be taken even by these borrowers as, according to a CNNMoney.com article, “…card offers usually play up the terms for someone with near-perfect credit,” and these instances could lead some consumers to enter into a credit card agreement that may bring about an interest rate increase over time.
While the CARD Act prevents consumers from falling prey to credit card lenders who will suddenly increase their rate, when it comes to balance transfer credit cards, there is usually a low rate offered, but this opportunity will only remain for an introductory period. Obviously, consumers may be able to take advantage of a balance transfer credit card that will offer a low interest rate throughout an introductory period, and then switch to a higher rate that still may be more affordable, but cardholders across the board must make sure that they look at what potential rate may follow a low introductory period that can offer the option for a balance transfer consolidation.
While Bankrate.com, among other financial sites that track various interest rates, currently reports average rates for low interest cards to be around 10.80% and balance transfer cards to be around 16.10%, these offers are not set in stone and can change after a promotional period has ended or may be higher for some cardholders. Considering these increases is something that must be factored into a cardholder’s decision, but when a borrower who may be able to take advantage of a low interest credit card feels that using a balance transfer option may be one way to consolidate and erase debts as well, there are more aspects of choosing a card that must be considered in this situation.
Suze Orman's Credit Card Tips | Australian Credit Cards
Why Tackle Credit Card Debt?
Many people don’t realise the importance of getting their credit card debt under control and Suze Orman explains her views with a simple example that is sure to mobilise you to get rid of all that debt. If you have a credit card with an outstanding balance of $5,000 with an interest rate of 17% and are only making the absolute minimum payments of 2% per month, then it will take you about 29 years to pay off your debt and will cost you almost $10,000 in interest. Having an outstanding balance of $5,000 is not unusual for people earning an average income.
So, basically, you are throwing $10,000 out the window and are looking at credit card slavery for the next 30 years if you don’t take control of your debt. Note that our example doesn’t take into consideration the fact that you might be redrawing any of the capital you pay down on your credit card, which will extend the timeframe even further and increase interest costs as well.
Of course, getting out of debt is not going to be easy but nothing that’s worth anything in life is easy and you got yourself into this situation so it’s up to you if you want to get out of it. If you don’t feel capable of handling your debt situation on your own, Suze Orman recommends using a credit counselling service as they can help you come up with a strategy to get your debt under control. However, remember that they can’t implement the strategy for you and they won’t magically make your debt disappear. In other words, you will still have to work towards becoming debt free.
To get to a point where you no longer have outstanding credit card debt will involve making changes to your lifestyle and how you handle your finances. The way you live your life and manage your money is what got you here in the first place so you can’t expect things to change if you don’t change. Remember the definition of insanity according to Einstein: doing the same thing over and over again but expecting a different outcome.
While you might be annoyed right now, thinking that you only use your credit card to pay bills and to buy necessities, in most cases many of those necessities aren’t really needs but desires. Is that Gloria Jeans coffee really necessary every morning at $5 a cup? No one’s saying you shouldn’t drink coffee, but brewing it at home is much cheaper. In fact, you could get at least ten cups of coffee for the same money and that’s if you’re using a really expensive blend.
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