Refinancing via a balance transfer card can be used to lower credit card debt. This method is suitable for people who have credit card debt as their main concern. It allows you to get a handle on your debt without going through an agency. This means you can put all of the money you have available towards your debt, instead of towards legal and other fees.
Balance transfers of this nature are fast and are offered through several financial institutions. You may already do business with a bank that offers this option.
Ideally, you would obtain a balance transfer card that charges 0% interest for at least a year. This would give you a year to pay off your credit card balance without worrying about interest.
This option works best for people who know they can pay off their balance during that time. If not, it may be better to consider a debt consolidation loan or debt management.
Conclusion: Which Solution Is Best?
The solution you choose depends on how dire your current financial situation may be and the outlook that you have for the future. If you have multiple credit cards with high interest rates, a debt consolidation loan can give you room to breathe, with a lower interest rate and manageable payments that steadily reduce your debt balance.
An option such as bankruptcy is often seen as a last resort. An individual may suffer financial losses after illness, a natural disaster or business losses arising from theft or even a pandemic that causes them to file for bankruptcy. Any solution that you choose will have both positive and negative effects, so it’s important to get advice from qualified financial counselors before you make a decision.