One of the best ways to consolidate credit card debt is to take advantage of a balance transfer offer. In order to qualify for a balance transfer offer, your credit usually has to be considered good, so not everyone will have this option. A cosigner could potentially help you to qualify for a promotional balance transfer offer if you have poor credit, but the cosigner then becomes partially responsible for your debt. Promotional offers for balance transfers usually offer a low interest rate for a set period of time, for example, zero percent for six months or 2.99% for the life of the balance (until the debt is paid). You should be sure you can pay off the balance in the time limit of the promotional offer, because the rate usually jumps much higher once the promotional period ends. The rate also jumps much higher if you miss a payment, so you need to be confident that you can make your payments. You can transfer balances up to the maximum amount of your credit line, thus consolidating several smaller debts into one large debt. You should also be careful not to use the new credit card, with the consolidated debt, for general purchases. As of August 2009, most credit card companies apply payments to lower interest debt first, so if you make a purchase, you will not be able to pay off that purchase until your entire balance has been paid off, and you will be charged interest on that purchase at the standard rate for the duration of this time.
-- Edited by darabell07 on Tuesday 6th of July 2010 02:55:42 AM
