Credit card debt is a leading cause of financial strain in the United States. The fact is that life happens, and unexpected medical bills, car repairs or gaps between paychecks can leave even the most careful budgeter relying on credit cards to get by.
Anyone who carries a balance from one month to the next typically accrues interest. They could also be at risk of fees imposed by the credit card company. It’s completely understandable to feel anxious about your finances when those balances keep growing despite your best efforts.
In some cases, an existing credit card might offer a generous balance transfer. Other times, a new card offer comes with an introductory balance transfer offer. Although a transfer might seem helpful, it may actually trap a borrower in worse debt.
Transfers don’t reduce what people owe
The main reason that credit card balance transfers may not be truly helpful is that they do nothing to reduce or eliminate financial obligations. The full amount is still due. The main change is that a different credit card company now has the right to demand payment from the borrower.
The offer may come with a low rate, but it is likely promotional. If the borrower doesn’t pay what they owe in full before the promotional period ends, the remaining balance may begin accruing interest at a much higher rate going forward. Additionally, fees are standard when transferring a balance.
The total amount of credit card debt might increase as well. When the original card suddenly has available credit again, it can be tempting to use it. Many people find themselves with balances on both cards, doubling their monthly obligations and stress.
You have options
Recognizing the risks that come from transferring balances can help people avoid potentially costly mistakes. If you’re struggling with overwhelming credit card debt, you deserve to know all your options, including solutions that can provide real, lasting relief rather than temporary fixes.
People struggling with overwhelming credit card debt may benefit from exploring the options for filing for personal bankruptcy. Bankruptcy protection can provide relief when debt becomes unmanageable, but it’s not right for every situation. Consulting an experienced attorney can help people make this determination.
