If you have debt racked up on multiple credit cards, consolidation may creep into your mind at some point. This can help you organize your debt while you also save money on interest.
Here are some of the many reasons to consider transferring your credit card balances:
- Save money: Not only are you eliminating finance charges for multiple cards, but you also gain access to a zero percent introductory rate.
- Easier to manage: It's easier to manage one credit card than several. This lessens the likelihood of missing a payment.
- Access to credit card perks: These potential perks include things such as reward points and cash back.
Along with these benefits, there are a couple of drawbacks you should also be aware of:
- Balance transfer fee: You're typically required to pay a balance transfer fee in the three to five percent range. So, if you're transferring $10,000, your fee will equal $300 to $500.
- You may not qualify: Whether you qualify is based largely on your credit score. If it's taken a hit as of late, maybe because of late or missed payments, you may not find a credit card issuer willing to do business with you.
There are times when a balance transfer credit card can help you dig out of debt and regain your former level of financial health.
There are also times when this does nothing more than move your debt around. If you come to find that a balance transfer is having no impact on your finances, you need to look into other options. Chapter 7 bankruptcy, for instance, is one of the best ways to eliminate your credit card debt for good.