You can find numerous articles and tips on how to eliminate your credit card debt in the Net. About 90% of those guidelines imply using balance transfer. And this really seems to be the best decision for people carrying considerable credit card balances. What can be easier? You just get a balance transfer credit card with 0% introductory APR and forget about money-sucking interest rates and just get rid of your debts.
Actually, it is much more than meets the eye. If only everything was so simple! If every credit card holder could transfer his or her balance every time their promotional period is over, then, probably, no one would have had outstanding debts. So, let’s figure out what can stop you from doing that.
Balance transfer cards are a very helpful device in managing a credit card debt. You can save a good deal of your funds on interest rate, having transferred your balance from a high rate plastic to a lower interest one. If you manage to get out of your debt during the introductory period with 0% APR, you will make the most of a balance transfer card.
However, recidivating cases of shifting balances from card to card will cause lenders’ suspicion for sure. A creditor having spotted you applying for a balance transfer plastic over and over again can just stop approving you for such deals. And this can be really destructive for your financial standing. You just get stuck with your debt while the interest on your previous credit card soars to its standard level.
Lenders appreciate credit consumers who pay interest. The reasons for that are quite clear. The money they make on the interest card holders pay is the major source of their revenues. That is why a customer constantly shifting balances is regarded as an undesirable client for credit card issuers.
Such bursts of balance transfer activity can aggravate your positions of a reliable and creditworthy borrower when it comes to getting a home or a car loan. People who have good credit cards with interest and pay off their balances on time have much more chances to get approved for such a sufficient loan, than those who try to evade the rules of lender-borrower relations.
Even if you manage to qualify for some umpteenth time for a balance transfer deal you should look out for some hidden pitfalls you might come across. A low rate you get on your new credit card is usually applied to the transferred balance only. Your APR for purchases can be rather high. So, remember the golden rule of balance transfer plastics use: avoid making purchases with your balance transfer card. But some cards of this type do offer low introductory rate on balance transfers and on purchases as well.
Besides, there are some other ways to handle your credit card debt. Try to cut down your spendings, find a regular low rate credit card or any other with a reasonable introductory APR. Analyze your items of expenses and point out the one that require the most investment. If you are a family person, for instance, you can apply for a home improvement rewards card. That will be a sufficient help to your family budget.
Despite all the above-mentioned warnings balance transfer credit cards managed reasonably are one of the most efficient ways to save some money and dig out of a credit card debt. Just be careful, balance transfers can be very addictive.