4. Consider Balance Transfers—Your New Best Friends
One debt consolidation method involves utilizing introductory, teaser interest rates offered by banks and credit card companies. Low or 0% interest rate accounts may be offered for balance transfers up to a specified amount, for a limited period of time. Banks may issue a debit or credit card, or open a line of credit (LOC) depending on the offer. Initially, little or no interest is charged on the newly transferred balances, however there is generally a transfer fee of 2%-3% per account.
Combining credit card balances under one low rate account can only work if the debt is paid in full before the introductory rate expires (usually 6-24 months) or the remaining balance is transferred to another new account.