The Best Low Interest Credit Card for Debt Consolidation

By: AdrianFletcher
It may seem like a contradiction to get another credit card if you are trying to solve a debt problem. Surely a new credit card is one more temptation to spend money that you haven't got and get yourself into more financial difficulties. This is true to some extent as credit cards are so convenient to use and are many goods and services actually make it easier to use a card than cash at times. However, a low interest credit card for debt consolidation can help to reduce your debt provided it is used right. This article will give you some pointers on how to do this.

The credit card industry is highly competitive so banks try to make better offers to potential customers and trump their competitors all the time. New incentives are dreamed up to encourage a certain niche to use their credit card. So air miles might appeal to business people that jet all over the place to hold meetings. Whereas credit or money back on clothing purchases may appeal to avid fashionistas.

For people with large debts, a low interest credit card with a balance transfer feature is probably an attractive option. For someone in debt, the major advantage of such a card is to transfer all the debt to the new card. A feature of these cards is a low or zero interest rate for any balance transfers for an introductory period.

With this done, you should be determined to pay of the debts before the balance transfer introductory period is up. In this way, you will save money on interest payments. It will also help you to stay focused on paying off the debt because you know you will save money if you don't hit the deadline. The debt payment will only be once a month too, making it easier to stay organized and not miss payments, as you may do with many cards.

Of course, the one important assumption that seems to pass many people by is that you will work towards paying off the debt. If you think that no interest for six months gives you a six month vacation from your debts then you are approaching the low interest credit card for debt consolidation from the wrong direction.

So in reality, you don't really need a low interest credit card for debt consolidation. You could try to get some other form of credit, like a bank loan instead. A bank loan will probably have a lower repayment rate than a credit card. However it is unlikely to have a 0% repayment rate for the first six months.

However, it is vital that you pay off the debt within the six month introductory period or you won't be better off. This is something you have to decide about before consolidating your debt. If you don't think you can pay off the debt within six months then maybe a low interest credit card with balance transfer is not for you. You may save more money by getting a bank loan.

Even if this is the case, getting a low interest credit card could be far easier than getting a bank loan. It may be a speedier and cheaper option in terms of the application too. Indeed, provided you stick to your goal of clearing your consolidated debt within the time period allocated, a low interest credit card with balance transfer could save you money and get you out of debt faster.