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Use Introductory Rates for Debt Consolidation |
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Sunday, 13 January 2008 |
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Is the debt piling up all around you? If it is time to consider debt consolidation, it may be time to take a good look at your junk mail. Start reading the fine print on those numerous credit card offers that keep flooding your mailbox. An introductory rate on a new credit card may be just the right plan of action to consolidate debt and save money. Frequently, credit cards will try to lure in new customers with a sparkling interest rate for a period of time after signing up for the card.
In many cases, the interest rate may be as low as 0% APR. Sometimes, you can hold onto this great interest rate for a year. When bills start piling up, it is possible to use this excellent introductory interest rate to your advantage. Consider consolidating your debt onto this new credit card to save big bucks and pay down the bill to a more manageable level. If you have credit cards with interests rate of 10 to 20 percent interest and you consolidate all of them to an introductory rate of 0%, you are putting your hard-earned money right back into your wallet. Also, with each dollar you pay off, you are lowering your total amount due. Even if the interest rate isn’t zero, a low-introductory rate on a credit card can really help consolidate debt and make bills more bearable.A trick to using introductory rates on credit cards is to eliminate as much debt as possible while the interest is low. Force yourself to pinch and save by paying a little extra every month to the card whenever possible. For instance, if you had three credit card balances totaling $1000, you can put the balances on a single card. This may even slightly lower your monthly payment, but don’t immediately assume you should simply pay the minimum. If you can afford to pay extra within your budget, you are saving a great deal of interest and payments in the future. A note of caution about introductory rates on credit cards. Be careful to read the terms and conditions very closely. Debt consolidation with this method can be helpful, but tricky. Some cards will offer the low rate for a few short months while others may allow you a year. Pay close attention to the dates. Make sure that the unpaid balance is the only amount the card will hold at the later date and not the entire balance from the initial debt consolidation. With careful understanding of the terms and conditions, consumers can really improve their financial circumstances by using introductory credit card rates to consolidate debt. Payments may become more manageable and money will be back in your wallet in no time. |
