What’s the one thing you dread the most? Maybe your creditor’s call or your credit card bill? That’s quite likely if you’ve missed a few payments. Your credit card bill is often the most merciless reminder of how much trouble you’re in. Experian’s annual ‘State of Credit’ study reveals that an average US consumer has a credit card balance of $6,354, which is a 3% increase from last year. This means that credit card debts have hit a record high. So, if you’ve been secretly enduring the perils of credit card debt, remember you’re not alone. However, you have to find a way to prudently manage your credit card debts. You have the option to refinance credit cards and make repayment easier.
What is Credit Card Refinancing?
Credit card refinancing simply means that you are transferring the balance from your credit card/cards to another one which comes with a much lower interest rate.
Why Should You Refinance Credit Cards?
Here are some reasons why credit card refinancing can work well for you:
Refinancing Offers – Credit card lenders often give you an offer of 0% interest rate on balance transfers. This interest-free credit line usually lasts for a temporary period of time after the balance transfer takes place. Although this offer may come to an end sooner or later, you will be able to save a considerable amount which you otherwise owe as interest.
Lower Rate of Interest – This is one of the primary benefits of refinancing. This has a long-term advantage compared to the temporary interest-free offers. The interest rate fixed on the new card is typically significantly lower. This makes repayment easier while helping you save a considerable amount.
Re-accessible Credit Line – Any balance you pay off will be accessible later as a new source of credit. This is because credit cards work on a revolving arrangement. This enables you to access your entire credit balance afresh.
Quick Processing – Unlike personal or home loan applications, refinancing applications do not require detailed paperwork or processing. In most cases, it can be completed effortlessly with a simple online application and a few easy steps.
The fact is that paying in plastic can put you in more trouble than you could have ever imagined. Defaulting credit card payments can particularly result in serious snowballing effects. So, go ahead and take your first step towards ensuring prudent management of your credit card debts, before it’s too late.