Beware of the special and introductory offers at ridiculously low interest rates. It's generally a bad idea to use credit cards to consolidate debt. I get bombarded with offers of anywhere from 1.99% - 4.99% credit cards all the time.
With 5 year mortgage rates hovering in the 5.99% range today for people with perfect credit how can credit card companies afford to offer a 1.99% rate on an unsecured credit card? They can but only in the short term to get your business.
I read the fine print on the back and the promotional rate only lasts for 9 months after which it goes up to the non-promotional interest rate of 19.99%. One offer didn't even tell me what the non-promotional rate was on the mailed offer; I had to look it up on their website to find out. In many cases promotional interest rates are based only on balance transfers; what that means is you only get the lower interest rate if you move other credit card balances to the new card being offered.
Be careful and do your homework, we have seen many people lured by special offers only to find when the promotional period ends so do their chances of paying off the debt.
People can get into trouble if they don't read the fine print and see what they are signing up for; when things appear to be too good to be true they usually are.
For credit cards follow these simple rules of thumb and (1) never charge anything to a credit card you cannot afford to pay off in full when you get the bill. (2) Credit cards and promotional offers should never be used to finance a lifestyle you cannot afford. (3) Live within your means and save money every month, rainy days do come and sometimes when it rains it pours so it's a good idea to have 3 months salary in the bank.
If you are drowning in debt, pay it off. If you can't and need help then look for the assistance of a reputable debt settlement company that will take the time to provide a free assessment on your situation.
Richard Cooper is Founder & CEO for Total Debt Freedom Inc. Canada's most respected debt settlement company. Originally conceived for the mortgage community in 2003 to help fund more sub-prime mortgages and fix turn downs due to bad credit; Total Debt Freedom also offers debt settlement plans up to 36 months for those that aren't homeowners. http://www.totaldebtfreedom.ca
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