If you are struggling with credit card debt, it’s a good idea to make a commitment toward paying it off. One of the best ways to do it is come up with a way to lower your interest rate. That can ultimately bring low costs and fees as well as a speedier process of paying off your debt. A solution for that is to choose a card with a zero percent APR rate for consolidating your debt, especially when it includes a high interest rate. If you are unfamiliar with this method for credit card debt consolidation, here is more information about it.
Consolidating with a Zero Percent APR Card
Consolidating your debt with a zero percent APR credit card is simple. Credit card companies frequently offer cards with an initial zero percent APR. After you apply for such a card and are approved for it, you can then transfer your debt that contains high interest onto it. After doing this, the debt from your original card is essentially paid off. You then have to begin paying toward the new card until settling your debt.
It’s important to note that if you have poor credit, you may not be eligible for a zero percent APR balance transfer option. If you fall under this category, you can still apply for a card that has a consistently low APR. It’s easier to qualify for those and you can still enjoy lower interest rates.
Advantages of Zero Percent APR Card Option
There are plenty of advantages that come with consolidating your credit card debt with a zero percent APR credit card. Here are three chief ones:
- Interest Savings: The biggest benefit of using a zero percent APR card for consolidating your debt is that you can save a load of money on interest. Cards today have interest rates as high as 30 percent, so it can really be a burden on your finances. You can save hundreds or even thousands of dollars when transferring the balance on such a card to a zero percent APR one.
- Simplicity: It makes everything simpler when you transfer multiple debts onto a single card. It means you only have to make a single payment each month and don’t have to think about which card to pay off first.
- Lower Risk: There is less risk in using a zero percent APR card than with other methods of debt consolidation. You don’t have to worry about losing any assets if you have difficulty making payments.
Be Wary of the Following
Even though using a zero percent APR card is probably the best option for consolidating your debt, you should still be wary of a few possible pitfalls. These include:
- Fees: Consolidating with zero percent APR cards come with fees of usually around three percent each time a balance is transferred onto them. This can really add up with multiple balance transfers.
- Failing to Pay off Card Before Zero Percent APR Period Ends: Be aware of the zero percent APR period and make sure to pay the card off before it ends.
- Late Payments: Avoid getting a zero percent APR card if you are consistently late with bill payments. The introductory deal can be cancelled if you pay late and you’ll be stuck with higher interest rates.
- Exacerbating the Problem of Your Debt: Don’t be tempted to rack up big charges on your other credit cards. It can cost you in the end and make your debt even worse.
In general, consolidating your debt with a zero percent APR card is a great option. As long as you stay focused and use the card wisely, you can rid yourself of your debt and worries.