As you ponder the idea of applying for a balance transfer credit card, most your attention will move toward the benefits. These include things such as saving money on interest, paying off your debt sooner, and reducing the number of payments you make every month.
While the benefits alone can help you decide for or against a balance transfer, you should also focus on the situations this strategy can help you avoid. Let’s dig deeper:
If you find yourself swimming in debt and unable to make progress, bankruptcy may eventually enter your mind. Through a Chapter 7 filing, you can reduce or eliminate your credit card debt.
Of course, this is easier said than done. Not only do you need to qualify for Chapter 7 bankruptcy, but it’ll also damage your credit score and remain on your credit report for 10 years.
With a balance transfer credit card you can change your approach to credit card debt, all with the idea of handling it on your own – without the need for a bankruptcy filing.
2. Negotiating with Credit Card Companies
Even though it’s an option, who really wants to negotiate with their credit card company? It’s time consuming, it’s stressful, and for some, it’s embarrassing.
A balance transfer credit card allows you to avoid all that, since you’re bringing your debt under one roof.
Once you pay your balance and close an account, you no longer have to worry about it. There’s no negotiating because the lender got what they wanted (payment in full).
3. Lost Time
How long does it take you every month to review your credit card statements, determine how much to pay, execute the payment, and plan for the next month? If you don’t know the answer, you’re not alone.
The more credit cards you have the more time it takes to manage them. But if you consolidate your debt onto one card, all this goes away. Now, you only have one balance to contend with.
You can cure a variety of problems with a balance transfer credit card. Just the same, by avoiding the situations above you’ll feel better about your finances and less stressed about the future.