Credit Card Balance Transfer Debt
http://creditfederal.com/article/articles/444/1/Credit-Card-Balance-Transfer-Debt
By CreditFederal.com - A good or bad credit personal loan, auto and mortgage financing, and credit card resource.
Published on 03/26/2008
How to avoid; and get out of, credit card balance transfer debt that builds up by transferring balances.
Stop Debt from Buidling due to Credit Card Balance Transfers
Daily consumers are bombarded with offers for a 0 interest credit card balance transfer. Though such cards; and the reduced interest savings of a balance transfer credit card, offer money saving advantages, there's a risk that for some is too great to pass up.
One of the bigger problems associated with such credit cards, is the lack of patience by consumers. Instead of reviewing the credit card terms and conditions (and fine print) carefully, they listen only to the marketing content and hence do not fully understand the rules of qualification. Some 0 intro balance transfer offers allow only a certain amount to be transferred; or require that the new purchase (charge) amount is kept below a certain level. Over-transferring or over-charging may void the 0% introductory balance transfer. And some cards have other rules as well, including keeping payments current for other lines of credit (including mortgage, auto, other cards, etc), and conditions such as maintaining a certain credit report score range. If you miss a payment, over-extend, or any other reason gives you a bad credit report score, the special introductory rate may be terminated. Be sure to read and understand all the rules, terms and conditions for not only being approved for the credit card balance transfer rate, but also to maintain it for the full term of the offer (usually six months).
Another problem is abusing balance transfers just to temporarily avoid interest debt. Some consumers have transferred their lives away. They balance transfer from one card to another, again and again, until their debt is so enormous they no longer qualify for a balance transfer or exceeded the limits offered by every credit card company in existence. Yet another problem is to transfer debt to a new card, and then continue using the old card and max it out.
The path to debt recovery. First, you need to stop building credit card debt. Quit using credit cards. Crack down on any extraneous spending. Get a second job and put every penny toward your balance.
If that doesn't work, consider a credit counseling agency, especially if the credit card interest rates have escalated. Or; if necessary, obtain an unsecured debt consolidation loan. The problem with a debt consolidation loan; however, is that once you get the loan and payoff balances, you're tempted to use the credit cards again and rebuild the debt. Then not only are you once again making high credit card payments, but also repaying the debt consolidation loan as well.
Certainly last is filing bankruptcy. But even before you file bankruptcy, consider do-it-yourself, free debt settlement. When you negotiate debt settlement, you are offering your creditor a reduced payoff. Typically, you can chargeoff up to 80%. Let's say you owe $10000 in credit card debt. You can offer the issuer a $2000 settlement. Of course, even this quick fix has its own set of problems. Your credit is likely to suffer, which may raise interest rates on your other lines of credit and prevent you from getting new credit approval.
One of the bigger problems associated with such credit cards, is the lack of patience by consumers. Instead of reviewing the credit card terms and conditions (and fine print) carefully, they listen only to the marketing content and hence do not fully understand the rules of qualification. Some 0 intro balance transfer offers allow only a certain amount to be transferred; or require that the new purchase (charge) amount is kept below a certain level. Over-transferring or over-charging may void the 0% introductory balance transfer. And some cards have other rules as well, including keeping payments current for other lines of credit (including mortgage, auto, other cards, etc), and conditions such as maintaining a certain credit report score range. If you miss a payment, over-extend, or any other reason gives you a bad credit report score, the special introductory rate may be terminated. Be sure to read and understand all the rules, terms and conditions for not only being approved for the credit card balance transfer rate, but also to maintain it for the full term of the offer (usually six months).
Another problem is abusing balance transfers just to temporarily avoid interest debt. Some consumers have transferred their lives away. They balance transfer from one card to another, again and again, until their debt is so enormous they no longer qualify for a balance transfer or exceeded the limits offered by every credit card company in existence. Yet another problem is to transfer debt to a new card, and then continue using the old card and max it out.
The path to debt recovery. First, you need to stop building credit card debt. Quit using credit cards. Crack down on any extraneous spending. Get a second job and put every penny toward your balance.
If that doesn't work, consider a credit counseling agency, especially if the credit card interest rates have escalated. Or; if necessary, obtain an unsecured debt consolidation loan. The problem with a debt consolidation loan; however, is that once you get the loan and payoff balances, you're tempted to use the credit cards again and rebuild the debt. Then not only are you once again making high credit card payments, but also repaying the debt consolidation loan as well.
Certainly last is filing bankruptcy. But even before you file bankruptcy, consider do-it-yourself, free debt settlement. When you negotiate debt settlement, you are offering your creditor a reduced payoff. Typically, you can chargeoff up to 80%. Let's say you owe $10000 in credit card debt. You can offer the issuer a $2000 settlement. Of course, even this quick fix has its own set of problems. Your credit is likely to suffer, which may raise interest rates on your other lines of credit and prevent you from getting new credit approval.