If you have been using a number of credit cards and as a result have ended up in debts in each of your cards, you need to consider options to get out of it. Credit card consolidation can be done either by taking a consolidation loan or by balance transfer method. In this article the method of balance transfer is discussed in details.

What is balance transfer method?
For credit card consolidation using balance transfer method can be a helpful option. In this method you transfer the outstanding balances from the credit cards which have a high interest rate to a single card with a low interest rate. In this way you can consolidate all your debts into one single card which has a low interest rate. As a result you are able to save a considerable amount of money on interest payments in the long run. Also, it becomes convenient for you to pay off your debts by making single monthly payments. You will notice that it becomes way easier for you to handle your debts now that you don’t have to keep track of multiple credit card bills which had different billing cycles and different monthly payments.

What are the ways in which you can transfer your balances?

There are two ways by which you can transfer your balances. These are described below:

• Transferring your balances to a low interest account – In this process you transfer the balances you have in credit card accounts with high interest rate to the one which has the lowest interest rate. In this way you are able to consolidate your debts into single monthly payments.

• Balance transfer card – In this process you transfer the balances on your accounts to a card with extremely low introductory interest rate such as 1% or 2% in order to consolidate your debts. These balance transfer cards are provided by financial institutions and credit card companies. One thing you should keep in mind is to pay off your debts till the low introductory interest rate period lasts. If you are unable to do so then the rate of interest rises exorbitantly and you may end up in a situation that is worse than before.
When you opt for credit card consolidation by balance transfer method, go through the terms and conditions carefully to know the actual cost you will incur. Most of the times, you just focus on the annual percentage rate (APR) that the credit card is charging. You should also consider the balance transfer fees, late fees, annual fees and other such costs to know what exactly you are in for.

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