Quick Step to Debt Consolidation

For anyone in a great deal of credit card-related debt, balance transfer credit cards can be a quick way to consolidate debts while avoiding heavy interest charges on a number of different cards. However, it's important to remember that a balance transfer credit card carries a built-in time limit in the form of a low-interest introductory period. So it's important for anyone considering debt consolidation through balance transfers to read the fine print carefully and know just how long that introductory period lasts.

If you've managed for (whatever reason) to accumulate a large amount of credit card debt, you're probably loath to think about getting rid of that debt by applying for yet another credit card. But with the advent of balance transfer credit cards, what seems like an insane idea can actually be financially sound. As long as you're careful to know the exact details of your balance transfer credit card's policies, particularly the length of your no-interest introductory period, you can begin to deal with your credit card debt without having to worry about constant interest knocking you two steps back for every step forward you make.

In principle, balance transfer credit cards work like any other credit card. The two important differences are an introductory 0% APR and a period during which transferring balances from one credit card to another incurs fewer penalties or fees (or ideally no penalties or fees at all.) What this means is that if you have a number of extremely high balances on several existing credit cards, you can in one fell swoop use balance transfers to consolidate all of your debt on a single balance transfer credit card. At that point, your existing credit card balances stop accruing interest, and just like that, you've got a stable position to work from in order to get out of your debt.

So balance transfers sound perfect (unless you're still not sure how you're going to get out of your existing debt, in which case your problem may run deeper than mere interest rates). But there are still some things you need to remember about balance transfer credit cards before applying. For one, there's the matter of that 0% introductory APR. The key word is "introductory", which means that eventually your APR is going to increase. Most good balance transfer cards don't have particularly high regular APRs, with something around 14% the norm among the most popular cards, so it's wise to know exactly what you'll be dealing with if you can't take care of your existing balances within the introductory period.

Additionally, you want to know exactly what your introductory period is. Six to twelve months is common among high-end balance transfer credit cards, but some cards reduce that period to three months if you perform any balance transfers during the introductory period--which is, of course, the only time in which you'd want to perform them. Take the time to read the fine print and plan accordingly. If you're faced with so much debt that balance transfers look like the only solution, chances are that three months isn't a reasonable time in which to pay everything off.

But despite these caveats, balance transfer credit cards are one of the simplest ways to move to more solid financial ground. What's more, if you're already in a great deal of credit card debt, you're probably familiar enough with credit cards to know what you need to look for in the fine print, and the real-world consequences of skimping on the research before applying. Relax a little--balance transfer credit cards are, on the whole, a good bet--but don't relax enough that you're not aware of exactly how much time you have to make the most of your debt consolidation. Balance transfers are a quick solution to credit card debt, but it's important to know just how quick you need to be.