Credit Card Balance Transfers
One of the most times honored of all credit card debt reduction strategies is the balance transfer. Transferring credit card balances from high interest credit cards to those charging a more reasonable rate can be a great way to save substantial money on interest charges, but it is important to exercise discipline and diligence when using this strategy.
The major selling point of transferring credit card balances to cards with lower interest rates, of course is a lower monthly payment. A lower monthly credit card payment can make a big difference in your finances, and the money you save can be used to pay down additional debt, creating a spiral of debt reduction.
It is important of course, to always be diligent when using this strategy, and also to exercise the fiscal discipline it will take to keep that debt from coming back in the future. Knowing all the terms of the balance transfer, including when and how the interest rate can change, is essential to do it yourself credit card debt consolidation.
That brings us to the major disadvantage of using balance transfers to low interest credit cards to manage and eliminate credit card debt. While credit card issuers clearly tout the low or even 0% introductory rate, the exact terms and conditions of that rate are usually buried in the fine print where they are more difficult to find.
It is important to know just when that super low interest rate expires, and be prepared to move on to another balance transfer offer when that occurs. It is also important to open and carefully read all communications from the credit card company while that low initial interest rate is in force. The terms and conditions of most credit cards give the issuer the right to raise the interest rate with little warning, and that letter you threw, unread, into the trash may be the bank’s way of telling you that your interest rate is about to go up. Be sure to read the letter carefully. If the interest rate is going up, be prepared to move on to the next balance transfer.
Playing the balance transfer game can be difficult, but for those who play it well the rewards can be quite substantial. It is possible to save hundreds of dollars a month, and to pay off the credit card years earlier, by using this popular strategy.