0 BALANCE TRANSFERS CAN BE TOO GOOD A DEAL
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| 0 balance transfers are a popular feature on credit cards, especially
as part of introductory rates. People use 0 transfer when
they get new credit cards, because their old ones have rates
that are too high and are crippling them financially. |
Typically, new credit cards will have a lower interest
rate than the one that you are paying, at least for the
first six months, to lure you in and get you to use their
card instead of the old one. They use 0 balance transfers as
an incentive to get you to switch your old balance to their
0 apr card. This is definitely a good deal for you, if it
really is a low or 0 apr card.
The problem is that it can be too good a deal, and you can
get into further and further debt, until you cannot get any
new credit cards with 0 balance transfers and a low or 0
apr. As a result, you'll have to start paying a high rate
for your credit card, instead of the low rate you've been
paying, and also pay lots of money to transfer your balance.
This happened to me once. I had lost my job while paying for
my house, and was temping at a low end service industry job.
Normally, it would have been enough to live on, but with my
mortgage payments, I was racking up debt. Instead of dealing
with it, I used low apr cards with 0 balance transfers to
cover my high interest rate debt. This was a good idea for
the first few months, but soon I began racking up debt
faster than I would have thought possible.
When my six month low apr offers from my credit cards ran
out, I tried to get new 0 balance transfers cards to move my
debt around, only to find out that no one was offering me
them any more. They didn't even come in the mail! I was
falling very quickly into heavy debt. Fortunately, I found a
new job in an ad agency, and quickly began to make an income
similar to what I had been making before, but the damage had
already been done. Six years later, I am only just emerging
from debt that I accrued during that period. A 0 balance
transfer credit card can be very useful, but it is no
substitute for responsible spending! In the future, I
definitely will be more careful with my spending and in
finding the
Best Credit Cards
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