If you are considering debt consolidation as a means of lowering your monthly debt costs and improving your financial position, 0 APR credit cards can be used for this purpose and save you more money than a debt consolidation loan. These balance transfer cards allow you to transfer the balances of your current credit card to a single zero rate introductory credit card. This means that during the introductory period you will not have to pay interest on your balance which can save you quite a lot of money every month. By using your interest savings to reduce your credit card balance, you can get out of debt far more quickly than if you consolidated your consumer debt directly into a fixed term personal loan.
To get the most benefit from 0 APR credit cards when used for debt consolidation, it is important to get the longest possible interest free term, a low balance transfer fee and low fees and charges. If you can get an introductory term of at least 9 months but preferably 12 months, you can make a serious dent in your debt.
The downside of using a credit card for debt consolidation is that as your balance reduces your available credit will increase proportionally. This means you will have to be very disciplined to not increase your debt further. One way you can protect yourself is by contacting the credit card provider to lower your credit limit whenever you reduce the balance by a predetermined amount.
It is also important to cancel your old credit cards once your balances have been transferred to 0 APR credit cards. Although some lenders will do this for you, many don't and the temptation will always be there to use the credit cards in a pinch. This can lead to a worse financial position than you are in currently.
To truly benefit from transferring your balances to 0 APR credit cards you also need to take an honest look at why you ended up with high credit card costs in the first place. This requires that you look at your spending habits and the way you organize your finances. Do you have a budget and if so do you keep to it? If you don't have a budget, now's the time to draw one up and stick to it. There are some excellent, free online budget calculators or downloadable spreadsheets you can use to help you create a reasonable and workable personal or family budget. Once you have improved your financial habits and have a plan for reducing debt and increasing savings, you will find that the financial pressure begins to ease.
At the end of your introductory term, you can choose to transfer the balance to yet another zero rate card or you can refinance your now much lower balance into a low rate personal loan. Used wisely, 0 APR credit cards can help you reduce your debt and get your finances in order. The internet has made sourcing these balance transfer cards easier than ever before. Simply do a search and you will discover how many offers are actually available. A credit card comparison website will make the whole process quick and easy by providing a small selection of the best offers to choose from along with an online application facility. Never has it been easier to transform your life.
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