Using Balance Transfer Credit Cards As A Debt Relief Option

It's no secret, many people these days have been forced into a financial hardship situation due to the world wide financial recession that we have been facing for quite some time. Many consumers have already made the choice to move forward with hardship programs offered by banks, debt consolidation and debt settlement programs offered by third party companies and even bankruptcy. However, there is one form of debt relief that is often overlooked by many Americans facing issues with charge card account debt.

This option is the utilize of balance transfer credit cards to reduce the overall interest on the debts. Balance transfer charge cards are the product of the overwhelming amount of competition in the credit card industry. Because there were a huge amount of different types of rewards charge card accounts out there, charge card account issuers had to come up with something new and exciting that would take the industry by storm.

The ultimate product was balance transfer rewards charge cards. These credit cards would allow Americans to utilize the new credit card account with a low interest rate to pay off other higher APR credit cards with one simple phone calls. In most cases, these balance transfer credit card accounts will offer an introductory APR of 0% for up to 18 months!

The added time without interest has allowed many Americans the ability to pay down large portions of their charge card account debt and pull themselves out of financial hardship situations. However, when applying for balance transfer charge cards, there are a few things that consumers should look for:

Introductory Interest Rate: The promotional annual percentage rate is the annual percentage rate that will be applied to the transferred balance for 6 to 18 months from the date of opening the account. When applying for a balance transfer credit card account for debt relief purposes, Americans should always make sure that they will receive a 0% interest rate for a minimum of 12 months. This will allow the people who choose to utilize balance transfer credit card as a debt relief option the ability to pay a large portion of their balance interest free.

Standard Interest Rate: Once the promotional period is over, the introductory APR will expire. At this point, the balance on the charge card will now accrue interest at the standard APR. Before applying for a new balance transfer credit card account, people should make sure that the standard annual percentage rate on the new account is not higher than the standard annual percentage rate on the current credit card account. A higher standard annual percentage rate can lead to more of an expense in the long run.

Transfer Fees: Over the past year or 2, many credit card issuers have been incorporating fees for transferring balances. Unfortunately, just about any decent balance transfer charge card account will come with a transfer fee. However, as long as the fee is no higher than 5% of the transfer, people generally still come out ahead.