What you are about to read may make you reassess your attitude to zero interest balance transfer offers. You will see exactly how these balance transfer offers are pushing more and more people into serious financial difficulties and you will also be able to see a few suggestions on how you can manage your debt better.
Credit card debt is rising at an alarming rate and many people are now getting into serious financial difficulties. One of the reasons is the promotion of no interest balance transfer offers and interest free initial periods.
Almost all of us have been tempted by these offers to change our credit cards and many of us have taken them up on the offer and moved our credit card debt and, for a limited time, had no interest to pay. But "just in case of an emergency" we usually hang on to our old card.
Then something happens, an unexpected bill, or a wedding or birthday gift that's been forgotten about. "Never mind," we tell ourselves, "I can put it on the old card - there's plenty of credit on there so it's no problem."
A few months and a few unexpected bills later the interest free period runs out and we find ourselves having to pay interest on both our new card and the old card. No we are worse off than when we started but that's no problem as we can look for another card offering another interest free period and zero interest on balance transfers.
It's so easy and the banks and credit card companies are so eager to lend you the money that it becomes routine, until that is, something goes wrong. You could fall ill and be off work, or, you could lose some overtime and your wages fall, or maybe that big deal you were relying on falls through.
It may just be that the credit card companies decide you have too much outstanding on credit cards and would have difficulty paying the repayments, or simply they spot that you are a regular churner of the debt and they don't want your business.
Whatever the reason, the result is that you have all the interest to pay and you start to struggle with the maximum payments and miss one or two. Because you've missed payments, it becomes even more difficult to find the next interest free balance transfer offer.
Now you have a real problem but it is one that can be avoided.
The suggestion could be that you don't use credit cards but it's unlikely that would be possible and ignoring 0% offers would mean that you are paying interest when it is not needed.
The simplest way to benefit from these balance transfer offers, but keep your credit card debt under control, is to cut up your old card when you switch to a new one.
That way you benefit from the 0% offer but also minimise your exposure to higher debt.
Once you have cut your card up though, it is essential that you contact the card issuer and close the account. Until you close the account the card issuer will continue to tempt you with special offers to use your old card.
Another tip is to never pay just the minimum payment. Always put the maximum monthly payment you can afford. Reducing your payments simply pushes back the time when you have to repay and in the long term increases your payments. Use the interest free period to reduce your debt to the minimum and if possible clear the balance.
Credit card companies don't offer an interest free balance transfer because they are feeling generous. They do it because, in vast majority cases, they will be able to charge you more in the longer term. Use interest free credit to benefit YOU not the credit card companies.
A great alternative to help avoid credit car debt would be to take out a Secured Loan (otherwise known as Homeowner Loan). By doing so, you will be able to merge all your existing credit into ONE affordable Secured Loan repayment. The commonly used term for this is a Consolidation Loan.
