Transferring Credit Card Debt Can Cost More Than Its Worth, Say Atlanta Bankruptcy Attorneys
Imagine that you're given the opportunity to transfer debt from your current credit card to one with a 0% interest rate. Seems too good to be true, right?
Unfortunately, it often is. Sure, it looks like the real deal at first glance. The less interest, the less you pay in the long run, right? But, remember, credit card companies didn't get rich because they put the customer first. There's got to be something in it for them - and that usually means fees, according to the Associated Press.
Here's what credit issuers won't tell you in those balance transfer offers.
Most transfers come with a fee, often between 3 and 5 percent. That means you could be forking over as much as $500 to transfer a $10,000 debt. And even if you determine that you'll save more than $500 in interest, don't forget that many crazy-low introductory periods expire after a certain amount of time - anywhere from a year to just a few months. That 0% rate could quickly turn into 15% or more. And if you make a late payment, expect to find yourself with an APR of at least 25% or 30%.
One more thing to consider: anytime you open a new card, you risk damaging your credit rating since having more accounts indicates you might be a higher credit risk. Instead of switching to a new company, why not simply ask your current card issuer for a better rate? It might help to politely explain that circumstances beyond your control are making it difficult to pay - and you're considering moving to a more affordable card.
In the end, there's a simple solution to too much debt: paying it down. But since that's usually easier said than done, there's a backup plan - bankruptcy. Bankruptcy is one of the most effective ways out of debt since it provides a payment plan tailored to your unique situation, as well as legal protection from creditors.
Learn how bankruptcy can help you find financial freedom when you sign up for a free personal debt analysis with one of our Atlanta bankruptcy attorneys. Why transfer debt when you can erase it for good?