The Truth About Credit Card Debt Balance Transfers

By Author: Brad Crenshaw
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You probably get offers from a variety of credit card companies offering you a new card with balance transfers at 0% for 10 months. That sounds like a great deal but in most cases it's probably not as good as it sounds. The 0% for 10 months is tempting but what will your rate be once those 10 months are up.

Have you ever missed a payment because this new credit card might have an additional fee for missed payments. Over the past 10 years fees for late credit card payments have gone up 400%.

Some are also raising rates for people who miss a payment. Ask this new company what their policy is on missed payments and read the fine print when you apply for the new card. Some companies have ridiculous terms in the agreement. It's not uncommon for them to include a clause in the terms that they can raise your rates if you miss a payment on another loan with another company. It might have a 10% rate but when you miss a single payment they will raise your rate to 25% and you can do nothing about it. The credit card issuers have the ability to raise rates at any time. They don't do this to good credit card holders as they ...
... can easily change companies.

A very common tactic is an additional cost for the transfer. The new credit card company might ask you for a fee that will vary depending on the amount of the transfer.

Currently the economy is under a credit crunch and lenders are looking to create new forms of revenue and increase existing. Fees across the board are going up and people are starting to complain and ask questions. Don't be surprised if the credit card companies have more federal regulations in the near future. The credit card companies were regulated but in 1996 the Supreme Court ruled that the banks can change fees and rates whenever they want.

Another potential downfall to transferring debt from loan to loan is it doesn't look good on your credit score. If you are in credit card debt trouble then you need to protect your credit score to the best of your abilities.

Good credit card balance transfer offers do exist but they are becoming a rarity and they are usually only good for people in serious trouble. Even then balance transfers are only a band aid solution. If you can no longer afford to make your minimum payments then you may need to look at a credit card debt relief solution.