There are many options available now for individuals who are in debt. Credit cards with low introductory percentage rates, debt consolidation loans or lines of credit, and home equity loans are the most common. Depending on the specific situation of the person in debt, one or more of these may be a viable option to getting out of debt and saving money on interest.
Balance Transfer Credit Cards
The first option is a credit card with a low introductory annual percentage rate. The advantage is that this would allow the consumer to consolidate current balances onto one card with a very low (possibly zero) percentage rate and make less payments in interest in the short term. However, these rates are introductory and do expire. When the rate expires, the interest will increase to close to or higher than what was being paid before.
There is usually a transaction fee for transferring these balances over to the credit card as well which is generally around 3-4% of the amount being transferred. If the consumer has the ability to pay off the loan in six months to a year (the usual length of time for the introductory rate) then this could be a good option for them. If not, then they will be back where they started to begin with.
