Credit card debt has a way of bogging you down. That’s even more so the case if you have debt spread over several different cards. This can make it difficult to manage, along with the fact that interest charges can quickly add up.
A balance transfer credit card is one of the best tools for making progress toward ending your debt. Here are five questions to answer today:
1. What is your total credit card balance?
Knowing your total credit card balance will help you decide if a balance transfer makes sense. If you have a small amount of debt, it’s not cost or time effective. However, if your balance is larger, such as north of $10k, it’s something to strongly consider.
2. How many credit cards do you have?
It doesn’t matter if you have one credit card or several, you can consolidate the balance with a balance transfer credit card. Double check this as you don’t want to leave out a balance that should be included.
3. What is the balance of each credit card?
You may find that consolidating a particular balance doesn’t make sense. For instance, if you have a credit card with a $200 balance, you should pay it off before consolidating your other balances.
4. What is your current interest rate on each card?
One of the primary benefits of a balance transfer credit card is the zero percent introductory rate. But remember, this rate will increase after the intro period expires. At that point, you must make sure that you’re comfortable with the rate. Knowing your current interest rate will tell you if you’re getting a competitive deal.
5. Do you qualify for a balance transfer credit card?
You can’t overlook this detail. If you don’t qualify for a balance transfer credit card you’ll need to turn your attention elsewhere, such as a debt consolidation loan. Review several offers to determine if you’re in a position to head down this path.
Final thoughts
A balance transfer credit card isn’t the right solution for everyone, but it could be just what you need to reclaim control of your finances. By consolidating your credit card debt, you’re saving money on interest and making it easier to manage.
Do you have any experience with a balance transfer credit card? Were you happy with your decision to use it? Would you add any other questions to the five above?
