Avoid Unexpected Costs When Consolidating Credit Card Debt
A person's savings might be quickly depleted by paying high interest rates. It could seem like all your money is going toward interest rather than the principal if you're stuck paying off high interest rates on loans or credit cards. If you want a lower interest rate and a smaller, more manageable amount of debt, credit card consolidation could be an option to investigate. It could seem reasonable, at first glance, to move your high-interest balance to a card with a substantially reduced interest rate.
Before you consolidate your credit card debt, though, check the fine print of your new lower-interest card. There may be hidden costs that you didn't anticipate that might end up costing you a pretty penny.
Then, what are the things you need to keep in mind? Try searching for "balance transfer fees." If your interest rate is too high, you may have to pay a fee to transfer it to a card with a lower rate. A fixed rate fee, sometimes between $35 and $45 USD, is often required to transfer a balance. It came as a rude awakening to some customers when they discovered the balance transfer fee was a fixed percentage of the total amount transferred. It reached a level of four or five percent. A five percent transfer fee, amounting to $100, could be applied on a modest $2,000 balance transfer. You should know that the balance transfer costs will be charged to your remaining balance on the new card with the reduced interest rate when you consolidate your credit card debt and move the balance to a new policy.
If you choose to delay paying the transfer fee, the interest will be added to the balance transfer fee by the credit card provider. Be wary of any additional fees beyond the transfer charge that may apply when you consolidate your credit card debt onto a new card with a reduced interest rate. There may be a fee associated with making a phone payment, but certain credit card issuers do accept it.
The phone payment cost might be as much as $10.00 per transaction, which can be shocking if you aren't prepared. To escape being stung by such a steep cost, you might need to change the way you pay. If your credit card issuer charges a payment or convenience fee, they should let you know before you pay.
You should inquire with the credit card company if they don't. Our perception of these costs as hidden is based on the fact that we might not have given them much thought when deciding to consolidate our credit card debt.
Be mindful that before extending a credit card offer, the issuing bank must inform the customer of any associated fees.Do your research and study the small print of the credit card agreement before you accept the offer.
Before you consolidate your credit card debt, though, check the fine print of your new lower-interest card. There may be hidden costs that you didn't anticipate that might end up costing you a pretty penny.
Then, what are the things you need to keep in mind? Try searching for "balance transfer fees." If your interest rate is too high, you may have to pay a fee to transfer it to a card with a lower rate. A fixed rate fee, sometimes between $35 and $45 USD, is often required to transfer a balance. It came as a rude awakening to some customers when they discovered the balance transfer fee was a fixed percentage of the total amount transferred. It reached a level of four or five percent. A five percent transfer fee, amounting to $100, could be applied on a modest $2,000 balance transfer. You should know that the balance transfer costs will be charged to your remaining balance on the new card with the reduced interest rate when you consolidate your credit card debt and move the balance to a new policy.
If you choose to delay paying the transfer fee, the interest will be added to the balance transfer fee by the credit card provider. Be wary of any additional fees beyond the transfer charge that may apply when you consolidate your credit card debt onto a new card with a reduced interest rate. There may be a fee associated with making a phone payment, but certain credit card issuers do accept it.
The phone payment cost might be as much as $10.00 per transaction, which can be shocking if you aren't prepared. To escape being stung by such a steep cost, you might need to change the way you pay. If your credit card issuer charges a payment or convenience fee, they should let you know before you pay.
You should inquire with the credit card company if they don't. Our perception of these costs as hidden is based on the fact that we might not have given them much thought when deciding to consolidate our credit card debt.
Be mindful that before extending a credit card offer, the issuing bank must inform the customer of any associated fees.Do your research and study the small print of the credit card agreement before you accept the offer.
