Credit Card Balance Transfer

Debt consolidation can also be achieved through a credit card balance transfer. If you have debt on multiple credit cards and a good credit rating, you can transfer these balances to a new card at a low introductory rate. 

Credit card companies compete for your business and often offer a 0% introductory rate for up to 12 months if you switch your business to them and transfer your balances. This could save you a lot of money if the average rate on the old credit cards is high.  

However, one must be really careful when using this method of debt consolidation because even a minor slip-up can boost the introductory rate to extraordinary heights. For example, the Citi^® Platinum Select^® MasterCard^® offers 0% APR for the first 12 months on balance transfers, which rises to 11.24% variable APR after that period expires. But, if you make a late payment, or exceed your credit line, or make a payment that is not honoured, your APR jumps to 32.24%. This can be quite a shock to people who are not prepared, so be careful and read the terms and conditions, and the fine print very thoroughly.  

There are thousands of cards out there and you must do some research and comparison shop before you settle down on one. Make sure you read the terms and conditions as they are different for every card.  Although most cards offer the teaser rate for 6 to 12 months, some cards have options to extend this rate by making new purchases on the cards. You might even find a few cards that offer the introductory rate on balance transfers until you pay the debt off completely.  The Advanta Life-of-Balance Platinum Master Card, for example, offers a 2.99% Fixed APR until you repay your entire balance transfer amount.  Keep in mind that if your balance is over $10,000 it is unlikely that you will find a card to which you can transfer this entire amount. Also, if you have a good credit rating you should have no problems qualifying for a card with a 0% introductory APR.