When it comes to clearing your credit card debt there are usually two options:
Balance transfer credit cards are credit cards which allow you to move your existing credit card debt from another credit card to your balance transfer credit card🌐 without paying any interest for a set period of time(These are more commonly known as 0% balance transfer credit cards).
The 0% interest time gives you time to pay off your debt without paying any interest. When the interest-free period comes to an end you will then move on to the card providers standard interest rate, so be sure to check this before choosing a balance transfer credit card.
Before you decide on a balance transfer credit card ensure you know how long it will take you to pay 🙄off your current debt without any interest charges and use this as an indication of how long of an interest free period you will need from your balance transfer credit card.
Can you use a balance transfer credit card to pay off a loan?
Your debt might not be on a credit card so how do you benefit from a cheaper credit facility such as a balance transfer credit card?
Money transfer credit cards allow you to move the money from the credit card to any account. This means you can move the money over to your bank account and use it to pay off your existing debts. Money transfer credit cards also come with introductory periods which can go up all the way up to 36 months. These are known as super balance transfer credit cards. Money transfer credit cards are also classified as balance transfer credit cards as you can transfer the balance out to another account.
Money transfer credit cards do come with fees although there are some out there which have no fees. You will need to check to see if the money transfer credit card you are eligible for has any fees attached to it.
Using Debt consolidation loans to pay off your credit card
Debt consolidation loans🌋 are also a good option. They are essentially personal loans which you take out and use to pay off all your debts. For a debt consolidation loan to be a good option, it will have to be cheaper than your combined debt in regards to the total interest being charged over the lifetime of the loan vs your current debt.
This simply means the combined interest charges🚀 of all your credit card debts will cost you more over their lifetime in comparison to the interest charges the debt consolidation loan will charge you. You should consider the fees charged for taking out a debt consolidation loan and which loan you will be eligible for if any.
You should avoid taking out a secured loan to pay off your debts as this could put you at risk of losing your property if you fail to stick to your credit card debt repayment plan.
Debt🦁 consolidation loans can also allow you to spread your repayments over a longer time which makes your monthly repayments cheaper. You should be aware that although this might be a comfortable and convenient way to pay for your debt, it might cost you more in interest charges in the long run.