By Joseph Kenny
It is not hard to have credit cards maxed out before you know it. Soon, though, the bills calling for payment on those things you bought begins to take its toll on your available funds. Before you know it, it may be next to impossible, almost, to catch up on your bills. Another credit card, however, may be just what you need to be able to give yourself a handle on your debt. In fact, a new balance transfer credit card may be just what you need to consolidate your debts.
Balance transfer credit cards enable you to transfer debt that you already have on one card to another one. As an introductory offer, many credit card companies that offer this type of credit card provide special deals on this type of transaction. Good balance transfer credit cards will offer you 0% APR interest for up to 15 months. This means that you pay no interest charges on the amounts you transfer to it.
The advantage here is obvious. Instead of continuing to pay a high interest on your credit cards, which actually reduces your payment toward the principal, a new card saves you money. You pay no interest for awhile, so all of your payment goes to reduce the principal on your old bill - unless you have added other purchases to the credit card.
Debt consolidation on this kind of credit card makes a lot of sense - especially if you take care not to max out your credit cards again. There should be some new restraint on those other credit cards - destroying some of them would probably be better for most people.
A balance transfer credit card is great for consolidating smaller debts onto one card. Look over the offers carefully, however, because some of these cards have fees for the transfers - up to 4%. You also need to know that some cards do not allow you to transfer any debt to them after you get it. All transfer amounts need to be listed on the application, in those cases.
The introductory offer will vary too, in some situations, so you need to pay careful attention. Sometimes the balance transfer portion of the special introductory offer is only for three months, and the other features of the same offer may apply for one year. This will take some careful reading on your part to make sure you get what you think you are getting. Obviously, only three months of 0% APR interest will help – but not much because it is so short.
Debt consolidation with one of these credit cards gives you some time to catch up on your bills. Be careful, however, to make sure you pay your bills on this new card on time. Some of these lenders, when you make just one late payment - or not a minimum payment, will take away the introductory offer rates and may give you an interest rate up to 29%! Needless to say - that won't help you reduce your debt!
Joe Kenny writes for the Credit Card Guide, visit to compare credit cards in the UK, or the UK Loan Store to consolidate my debts
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