Credit Card Debt Consolidation - So What's The Big Deal About Balance Transfers?

When you are in credit card debt, one of the ways to work towards credit card debt reduction is to go in for credit card debt consolidation. Many credit card debt consolidation counseling agencies, in the course of assessing your debts, also suggest going in for a 'balance transfer' of all your high interest credit card debts to a low or zero percent credit card. As a credit card holder, you most probably receive a number of low interest credit card balance transfer offers. Before you jump at any of these attractive offers, there are many things you must know about balance transfers. What if you find that you are actually paying more after transferring your balance to the so-called low interest or zero interest credit card? There is no point in acting in haste and regretting at leisure. Balance transfers can work for you, so long as you are fully aware of what you are getting into.

So What Should You Know About Credit Card Balance Transfers?

• The duration of the interest rate offered to you:
  These credit card companies that attract you with introductory low or zero interest usually offer it for a fixed time of say, six months or a year. You therefore need to plan a course of action about how you intend paying off the debts you transfer. Can you clear your debts within the low interest period? Use a credit card debt consolidation calculator and work it out. If you cant clear your debts within the offer period, there's no point in transferring your balance.
• What strings are attached with the low rate?
  Nothing comes for free. The low interest offer may be conditional. Find out what these conditions are and whether you can handle them. Some cards insist on your buying something each month or paying off all your bills on time to maintain the offer rate.
• Does the offer interest rate apply to new purchases too?
  This is a tricky one. Imagine paying the low rate for the transferred balance, and an exorbitant rate for all your new purchases.
• Will the credit card company charge you a fee to transfer the balance? Wouldn't you rather save that money?
• Find out the math involved in calculating average balance. A good deal is a company that calculates daily average balance. Anything else could result in losing you the grace period to pay for your new purchases.
• In case the rate changes, what is it likely to be? After all your intention is to get a better deal to save money. Fluctuating interest rates can work either way.
• Are you eligible for the offer of the low interest rate? Depending on how large your credit card debt is, you may or may not be eligible for low interest rates. So find out all the information before you apply for the balance transfer.
• Security issues on your personal details When you apply for a credit card, you want to know how serious the issuing company is about data security, protecting you from identity theft and hackers who sneak into your personal data. Find out the company policy about how they deal with it.

It is worthwhile spending some extra time getting all the information instead of rushing into what you feel could be a good offer. Read all the communication you get from the credit card company. You never know what it might tell you. It is time to become debt free.