A Balance Transfer is when you switch your outstanding credit card balance from one creditor to another. Many credit card companies will offer you a lower promotional interest rate if you transfer your existing credit card balances to them. This seems like a good idea, and this is an option that many people choose, but we are opposed to balance transfers for several reasons.

Many people receive balance transfer offers that advertise a low interest rate or a 0% rate on any balances that are transferred to the new creditor. The problems is that just because a creditor will advertise a certain rate, it does not mean that you will get that rate, or that you will even qualify to transfer your balance at all. If you do qualify, that promotional rate will usually increase significantly after 6 to 12 months, which means in order to take advantage of the promotional interest rate, you have to have your whole balance paid off within that 6 to12 month period or you will start being charged a higher interest rate again. Moving from credit card to credit card and continually opening new accounts when your promotional rates expire will negatively affect your credit rating.

You need to keep in mind that promotional interest rates only last if you pay on time, and chances are, if you are going through financial hardship, this might be hard for you to do. After only one late payment, the company you transferred your balance to will most likely raise your rate, and you’ll be right back where you started. Transferring your balance from one card to another will not get rid of your debt, and it will not reduce the amount that you owe. By transferring your balance, you are simply moving your debt from one card to another, many times leading to a situation where you are putting yourself in a worse predicament than you were in to begin with. Remember, you got into trouble in the first place by borrowing money, so borrowing more money won’t get you out of trouble.

At S.J. Packman & Associates, before we make any recommendations, our attorneys, certified debt specialists, and paralegals, are trained to ask the right questions to find out about your specific situation. Based on your current income and your financial hardship, we will determine which course of action will work best for you. We do not only offer one path, as there is no one process that can solve everyone’s needs. We will take our time with you and help evaluate what your best course of action should be. Call now and one of our advisors will be there to get you started on your path to financial freedom. There is no obligation to enroll, so don’t delay.