Bank Consolidation Loans and Balance Transfers

If you are struggling in an effort to organize and pay your credit cards, a credit card debt consolidation loan or balance transfer is a great way of consolidating your credit card debt. Combining your debt to clear off your high interest credit cards can make your life so much more organized and manageable.

A bank consolidation loan is ideally a low interest loan that you apply for with a bank or other financial institution. This type of loan would be paid in monthly installments. However, many banks require a form of collateral for these types of loans. Credit card debt is unsecured debt and banks want to secure it with assets you may own as a guarantee there is a way for them to get their money if the payments are not made according to their terms. They will usually use your house equity or perhaps a paid off vehicle you may own for this assurance. Some banks can give you favorable terms, especially if you have had a previous relationship and are in good standing.

Usually, going through a credit card consolidation by the way of a credit card balance transfer is the best option. You combine the unsecured credit card debt from several credit cards into one or two cards. When transferring the balances of one or several credit cards to another credit card, the credit card of your choosing must have the lowest and longest standing interest rate (APR) and have the most favorable terms. This transfer of card debt could be a card you currently have and use, or a new credit card with favorable introductory terms.

When looking for to whom you want to consolidate your credit card debt with, understanding the terms of the agreement is imperative. You will need to exercise caution and properly evaluate the offers from banks and credit card consolidation providers. Some providers will state an attractive 0% APR. You need to know how long the zero APR is in effect for. Usually the low APR will be anywhere from six to twelve months. Also, you need to know if there are any balance transfer fees.   Depending on the amount you are transferring over to the credit card, some credit card suppliers charge a percentage of the amount you are transferring to them. However, if the APR terms are favorable, don’t let the one-time balance transfer fee deter you from moving forward with the consolidation.

Another advantage to consolidating your debt with a balance transfer is that your new provider may offer additional benefits to your terms such as discounts on new purchases, special offers, reward points or rebates.   Be sure to keep an eye out for any other special incentives they may offer.

Consolidating your unsecured credit card debt onto one credit card is ideal to assist you in managing and organizing your debt. Once you see a few to several balances all on one credit card statement, you will know where you stand with all your unsecured debt.   Hopefully, managing your credit card debt with a balance transfer or debt consolidation loan will make you life a whole lot easier.