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Indestata > Debt > Credit Card Debt Consolidation With a Low Interest Credit Card
Debt

Credit Card Debt Consolidation With a Low Interest Credit Card

TSP Staff By TSP Staff Last updated: September 5, 2025 3 Min Read
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Is this method of consolidating debts a good idea?

If you are considering using a credit card as a debt consolidation option here is what you need to know. A low interest credit card often comes with strings attached, so be very cautious if you’re considering applying for a new credit card to consolidate debt. Read and understand the fine print to make sure that you are aware of all of the terms and conditions before you do this.

Consider this example: someone borrows $12,000 on a low interest, introductory rate credit card (3.5%) for 12 months. Could they could use this $12,000 to pay off a higher rate card?

Know Your Budget and Plan to Pay Back What you Borrowed, Plus Interest

To take advantage of such an offer, someone would have to plan to pay off the $12,000 within the 12 month period. To do that, they’d have to pay off the amount they borrowed, so the $12,000, plus the interest, about $420 for the year. The calculation is: $12,420 divided by 12 months, which equals $1,035.

Affording a monthly payment of $1,035, on top of managing all of their other debts and expenses, might be unrealistic.

Be Mindful of Changing Credit Card Interest Rates

The terms and conditions on the card likely also mean that only the balance transfer (the $12,000 to pay off another credit card) is at 3.5%. Additional purchases might be at the regular rate, which is often around 19.99% or higher. After the 12 month introductory period, the annual interest rate on the whole balance will typically jump to this regular rate as well.

Contact Us for More Information About Credit Card Debt Consolidation

For many people, it would make more sense to look at other debt consolidation options, before using a credit card to consolidate debts. To get help looking at your options so that you can make a good decision that won’t put you further into debt, contact us and speak confidentially with one of our Counsellors. We’re happy to help.

 

Related article

Consolidate by using your Credit Cards

 

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