subject: Credit Card Debt Consolidation – A Good Option For High Interest Credit Debt [print this page] High interest rate credit cards are a drain on a lot of consumers. With so many people stuck in high interest rate cards, many are looking for a solution to lower their monthly payments. Many people have started to utilize a simple method of transferring credit card balances to a single card making for one simple monthly payment.
This is a great idea for many people, but they need to be aware of some basic "traps" that people fall into when combining accounts to consolidate credit card debt. These traps can actually end up costing you a lot of money that you could be applying towards paying down your overall debt. Of course if you are transferring your credit card debt from a 26% interest rate card to a 12% interest rate card, the savings are obvious to see. However, if the rate is not that much difference, the fine print involved may end up costing you quite a bit.
One of the things to watch out for is a balance transfer fee. This is a fee that credit card issuers will charge to "allow" the debt to be transferred from one company to another - this can often time be as much as $45 - even more in some cases. That is bad enough - the real trouble comes with what some companies have done recently which is to charge a percentage of the outstanding debt as the transfer fee. Depending on the debt you are transferring and the credit card company's fee - this could add up to quite a bit.
Some other fees that credit card companies might charge that you need to be aware of are fees like online account fees where they charge you to pay bills online, or use their online service. Similarly, you could be charged for paying monthly bills over the phone - usually this is charged by the billing company, but some credit card companies charge these fees as well if it is a recurring payment. Make sure to check on this if you are a frequent user of these types of services.
For most people, the ability to consolidate credit card debt into one simple and lower payment makes a lot of sense. It really all comes down to how much you are going to save as well as the conveniences particular cards offer. Just make sure that you do a little bit of homework to check out the fees that are hidden in the fine print.
Credit Card Debt Consolidation A Good Option For High Interest Credit Debt
