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The dangers of balance transfers for Tennessee residents

People are always attracted to deals and discounts that allow them to save more money. For this reason, many credit card companies offer services that let consumers avoid the interest charges of credit card debt. However, many Chattanooga, Tennessee, credit card users should take note that such an offer may do more harm than good to their financial situation.

For example, balance transfers let consumers to transfer a balance from one card to another credit card that has lower monthly interest. However, balance transfer does not always pay off. Most zero interest rates on balance transfer are just for a specific period of time. This means that once the low-period ends, the interest rates on any unpaid balance will begin to rack up more.

Considering this, if the person who has credit card debt transferred an unpaid balance to another card with lower interest rates, failing to pay off the card before the promotional period expires may result in higher interest rates on both balance and transfer fees.

Cardholders should be careful of fees. Typically, card issuers will charge a percentage fee on the transferred amount. This means that if a balance transfer is worth $10,000, a 3 percent fee would be an additional $300. It is essential to consider the balance limits and the card's annual percentage rate because these two may increase credit card debt.

Before taking advantage of balance transfer due credit card debt, residents may consider other options, like asking the credit card company to lower the interest rates. If the user wants to get rid of the credit card debt, however, filing a Chapter 13 bankruptcy might be a viable option. A Chapter 13 bankruptcy may present alternatives that would eliminate the debt without liquidating personal properties or wage garnishments. With this, debtors may begin to learn how to live a debt-free or low-debt life.

Source: The Durango Herald, "Is transferring credit card debt right for you?," Alex Veiga, Mar. 7, 2014

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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