by Jeff
15. October 2011 17:31
Chances are, that most people who have debt are plundered by multiple credit card bills that spun out of nowhere. Having multiple credit cards is a headache to deal with not only because you have several bills you need to take care off at the end of the month or billing cycle, but you also have to shoulder individual interest rates per card and one would be higher than the other. Having to deal with interest is something but having to deal with multiple ones would be a whole different ball game. In this type of situation it would be great if you can “consolidate” your balance under one card whichever would have the lowest interest rate possible. And this is where credit card balance transfers come into play.
Transferring card balances have been around since credit cards started but not a lot of people understand the advantages it brings and how it can help you better manage your debt and bills. So in a nutshell, transferring credit card balances is the process of “consolidating your debt from other credit cards bills under one card whichever has the lower or lowest interest rate would be the best to house the debt. With the process, you can eliminate the need to pay up individually and simple have the balances be payed off under 1 account. Through this process you can quickly and easily manage and keep up with your credit card balance and hopefully cut down effectively through wise financial spending.
Of course the process of balance transfer comes with a one time fee from the institution that would accept the transfer. Not to mention posing as an unsecured high risk debt, banks see it as a perfect avenue to earn through the interest rate they charge for balance transfers. Though a good understanding of how interest rates work would surely help someone to better choose the right card for the transfer. Interest is what the bank straps on top of your bill or their profit for lending you money through loans or credit card purchase or the cost of credit.
Now keep in mind that any type of debt management would not stand on it’s own if you won’t responsibly pay your dues. Missing out on your payments is the first step to being buried in debt. If you won’t be able to pay up on the due date, consider communicating with your creditor to advice of your current circumstance and pledge a date when you’d be able to comfortably pay.
So for folks who have multiple credit card balances on different cards, if paying them individually proves too much, then it would be in your best interest do a credit card balance transfer to alleviate your balance and avoid inquiring high interest rates. A good rule of thumb is to nominate a card with the lowest interest rate to house the transfer for you to enjoy practical payments that fit your budget.