Using Balance Transfer Credit Cards to Consolidate Credit Card Debt

Balance transfer credit cards can benefit consumers. How?

A balance transfer credit card allows you to consolidate your credit card debt. You transfer your outstanding balances onto a single credit card and can save on interest charges because of low introductory rates or guaranteed fixed rates for a fixed period.

It makes sense to pay less interest on one outstanding balance, over paying higher interest rates via numerous credit cards.

Many people have a number of credit cards and then face monthly payments with interest charges across multiple credit cards. Not only is this scenario, one that is harder to keep track of but it can be more costly in the long run.

What Can You Expect From a Balance Transfer Credit Card?

• Some balance transfer credit cards may waive a transfer fee. But you may have to pay an annual fee.
• Other credit card companies that offer balance transfer may charge a small fee for the balance transfer but not charge an annual fee.
• In either case, if these fees are less than the amount you would be paying in interest, using a balance transfer credit card to consolidate debt might be the better option.

It pays to do a price comparison of balance transfer credit cards, factoring in any transfer fees, yearly fees, and interest charges on outstanding balances. These differ and shopping around can help to put money in your pocket.

Not all balance credit card offers are alike so it pays to evaluate and compare offers before deciding on a card, when seeking to manage credit card debt.

For example, looking at one Canadian credit card site:

• A Platinum MasterCard (for those with good credit) offers a sweet deal to those who pay their bills on time: interest at 9.99%, guaranteed for 3 years, N/A balance transfer fee, and no annual fee. (Compare that to interest charges of 17-19% for other cards.)

• The Platinum MasterCard set interest rate means you can transfer balances and you aren't under financial pressure when the introductory rate expires.

• A SmartLine Platinum MasterCard (for those with excellent credit) offers an even sweeter deal: 5.99% interest for 3 years, n/a balance transfer fee, and no annual fee!

* This card has the longest low-term interest rate in Canada. Card holders receive the same interest rate on balance transfers and purchases for 3 years.

If you are looking to amalgamate credit card balances onto one card for lower interest rates and one convenient monthly payment, balance transfer credit cards might just be the answer.

A balance transfer credit card can be a definite asset, when used smartly. It can give consumers a financial cushion for unexpected emergencies and you can consolidate debt so that it is easier to manage.

Choosing a credit card that allows for balance transfers is a workable method of debt consolidation and management.