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If you are one of many of us that have several credit cards and all of them are starting to hit their limit, it may be worth looking at moving some or preferably all of them to a new card.
Most banks and financial institutions offer special interest-free or reduced interest periods from 3 months to 12 months on new cards. Usually these rates are only available on transferred balances, not on purchases which is just fine. Now assuming that the new card’s regular interest rate is less than you are paying now, you’ll be much better off to move the balances over.
This is usually much easier than applying for a consolidation loan as banks generally will issue a credit card more easily than issue a personal loan. Given that for the reduced interest period you repayments will also be significantly reduced, you have an opportunity to pay down more of the outstanding amount during this period than you otherwise would.
Once your interest rate has returned to normal, there is actually nothing stopping you from moving the balance again to a different card, also offering a cheaper rate! Theoretically you could go 2 or 3 years with paying no, or less than 3% interest – which could save you hundreds, or even thousands of dollars.
If anyone has actually done this more than once, please post your comments.
