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Believe it or not, there are ways to consolidate debt with an intelligent use of credit cards. It is not a very orthodox system but sometimes due to bad credit, people do not have other options.
Everybody knows that credit card companies are always looking for new customers and in order to convince them they offer all kinds of benefits. Among these benefits we will concentrate on low interest rates and no fees for balance transfer. These benefits, if used correctly, can help you reduce your debt significantly and cut on the amount you pay on interests. You can save thousands of dollars by using these credit card features.
Low Interest Rates
There are cards that simply offer low interest rates and others that offer an even lower interest rate but just for a promotional period of time. Whether you need the first kind of cards or the second one depends on how long do you think it will take you to eliminate your credit card debt.
If your debt is too big and your income will not allow you to reduce your debt consistently in a small period of time, you should opt for the lower interest rate credit card you can find but one that will not change the interest rate once a promotional period has been exceeded. This is due to the fact that a small income will not allow you to take fully advantage of 0% APR promotional periods and because interest rates when the period is finished are usually higher compared with regular low interest credit cards.
If your debt is not that big or if your income is decent you can apply for a credit card with a low introductory rate. Sometimes you will even get a 0% interest rate for a couple of months which you can make good use of by transferring all your debt to this card and paying as much as possible when the credit card payment is due. This way all the money will be destined to cancel the principal as no interest rate will be charged during the promotional period.
No Fees Balance Transfer
The other thing you need to make sure of is that the credit card company will not be charging you a fee for transferring the balance of your other credit cards, because otherwise you may be saving money from interests but paying even more in fees and other costs and that is not a good deal. If the credit card does charge a fee do not opt out immediately, instead, consider whether the fee is smaller than the amount of money you will be saving from paying less interests and if so you can regard it as an option.
Usually all fees and costs are concealed in the small print of the credit card contract so before signing anything ask for a copy of the contract and take your time to read it and do not hesitate to require further information if you think it is not clear enough how much you will be charged for each topic. Always remember, cautious people rarely get ripped off.
Everybody knows that credit card companies are always looking for new customers and in order to convince them they offer all kinds of benefits. Among these benefits we will concentrate on low interest rates and no fees for balance transfer. These benefits, if used correctly, can help you reduce your debt significantly and cut on the amount you pay on interests. You can save thousands of dollars by using these credit card features.
Low Interest Rates
There are cards that simply offer low interest rates and others that offer an even lower interest rate but just for a promotional period of time. Whether you need the first kind of cards or the second one depends on how long do you think it will take you to eliminate your credit card debt.
If your debt is too big and your income will not allow you to reduce your debt consistently in a small period of time, you should opt for the lower interest rate credit card you can find but one that will not change the interest rate once a promotional period has been exceeded. This is due to the fact that a small income will not allow you to take fully advantage of 0% APR promotional periods and because interest rates when the period is finished are usually higher compared with regular low interest credit cards.
If your debt is not that big or if your income is decent you can apply for a credit card with a low introductory rate. Sometimes you will even get a 0% interest rate for a couple of months which you can make good use of by transferring all your debt to this card and paying as much as possible when the credit card payment is due. This way all the money will be destined to cancel the principal as no interest rate will be charged during the promotional period.
No Fees Balance Transfer
The other thing you need to make sure of is that the credit card company will not be charging you a fee for transferring the balance of your other credit cards, because otherwise you may be saving money from interests but paying even more in fees and other costs and that is not a good deal. If the credit card does charge a fee do not opt out immediately, instead, consider whether the fee is smaller than the amount of money you will be saving from paying less interests and if so you can regard it as an option.
Usually all fees and costs are concealed in the small print of the credit card contract so before signing anything ask for a copy of the contract and take your time to read it and do not hesitate to require further information if you think it is not clear enough how much you will be charged for each topic. Always remember, cautious people rarely get ripped off.