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Why A Balance Transfer Credit Card Won’t Solve Your Debt

With so many credit card companies circulating in today’s economy, settling on one card has proven to be a blessing, a curse, and a challenge for the hard-working average Joe. Different companies are constantly promoting their low interest rates as they capitalize on the consumer’s spending benefits. Although a credit card balance transfer may save you money in the long term, it certainly does not guarantee or solve your current credit card debt problem. The following information will better explain why a credit card balance transfer won’t solve credit card debt.

What Is A Credit Card Balance Transfer?

A credit card balance transfer is when you move one credit card balance to another credit card. Some people jump at this opportunity because they want to take advantage of “the new” card’s lower interest rates or other benefits that may sound appealing. However, before you transfer your credit card balance, make sure you research and address the pros and cons of this decision to ensure a positive effect versus a negative one.

The Pros and Cons of a Credit Card Balance Transfer

When looking into a credit card balance transfer, consider taking action if you are run into any of the following potential benefits:

  • Credit Card Issuer Has Decided to Raise Your Interest Rate: If you have a credit card that has a lower transfer interest rate fee, transferring a higher interest rate balance may save you money on the initial interest charges. This is a pro because it allows you to repay your balance quicker, if not sooner.
  • Moving to a Card with Better Terms: If your current credit card has unnecessary high fees and offers a short grace period for repaying, then moving your balance to a better card proves to be the ideal choice.
  • Consolidating Credit Card Debt: Transferring your credit card balance to a single card will alleviate the stress of repaying multiple credit card bills. Pay off your debt easier on one credit card rather than worrying about paying multiple credit card bills instead.

When considering a credit card balance transfer, be sure that the negative effects do not impact your finances in the long run. Many people forget to factor in the cons of a credit card balance transfer, such as:

  • Higher Interest Rates: Unless you use a promotional balance transfer, many people are left to pay higher interest rates. Unfortunately, most credit cards have increased or higher interest rates for balance transfers than on purchases made. In order to benefit from a credit card balance transfer, you typically need to have an excellent credit score to even qualify for the low promotional interest rates – unfortunately not everyone does.
  • Balance Transfers Aren’t Free: Many people are unaware that balance transfers aren’t free and typically get expensive. In order to benefit from a balance transfer, consider the balance transfer fee and the annual fee offered by the new card. You will always have to pay a percentage of the balance you’re transferring, which is also called the balance transfer fee. In some cases, the new card may change the annual fee, making the overall balance transfer fee more costly for you.
  • Your Credit Score Can be Affected: A credit card balance transfer could negatively impact your credit score. Every time you have a credit card with a balance over 30 percent of the credit limit, you lose points on your credit score. Therefore, moving your balance to another card that doesn’t have enough available credit can impact your credit score significantly.


If your goal is to minimize your debt, then be sure that you have done your research thoroughly to ensure that you avoid increasing your already established debt.

Credit Card Balance Transfers Won’t Solve Credit Card Debt

Balance transfers may not solve your credit card debt completely. They can, however, provide you with better options for managing your credit. Examine the promotion – it doesn’t promise to eliminate your credit card debt – it only serves to shift from one account to another. Instead, take into account how much a credit card balance transfer will cost you and then compare that to how much money you’ll save in the future. Before you move your already existing credit balance to another card, as yourself these questions:

  1. Do I have a card with available credit?
  2. Do I qualify for a promotional rate? If so, when does it end?
  3. What is the post-promotional rate?
  4. How long will it take to pay off the balance?
  5. Will a balance transfer save me any money?
  6. Does the new credit card have an already established balance?
  7. How high will my respective credit limits be after the transfer is complete?


Although your answers to these questions will help you minimize any future damage to your credit card debt, it is important to acknowledge that a credit card balance transfer will not solve your current credit card debt problem.

We are all looking for ways to consolidate, eliminate, or prevent credit card debt. However, with various credit card companies advertising promotions that offer great benefits, many people end up accumulating even more debt by agreeing to a credit card balance transfer. Make sure that the benefits of transferring your credit card balance are in your favor before you make that final decision.