Why Credit Card Balance Transfer not suitable for Spendthrifts
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Balance Transfer Cards » Why Credit Card Balance Transfer not suitable for Spendthrifts

Why Credit Card Balance Transfer not suitable for Spendthrifts

Add to Favorites:
The credit card balance transfer service maybe a convenient way for consumers such as yourself to lower their interest rates when they use it, but this special feature is not meant for spendthrifts and big spenders. There is a limit to how much you could use this special feature of lowering your interest rates, and this method is most recommended for consumers who prioritize in paying off their debts and settling their other financial issues. This article would explain why this is the case. The special trick that the credit card balance transfer service uses to lower your interest rates is through its low or 0% interest rate that is available for the first few months that you sign up for the service. When you transfer your funds from one account held by your old credit issuer to a new one held by a different credit issuer, your debts would also be carried over but the interest rate from your old account would be lowered or even nullified according to the interest rate of your new account. For example, in your old account you have an interest rate of 10% that you owe to your credit issuer but that would be lowered to 0% when you transfer to your new account if that is the new rate of your new card issuer. Thus, your debts to your card issuer would be lowered for your convenience. But as mentioned earlier, there is a limit to how much you could make use of this trick. Even when your interest rate gets lowered or even nullified, the amount of your debt still remains the same and you still have to pay that amount to your credit issuer. So you could not just simply use your new credit account to make purchases and merchandise as much as you want, because that still increases the amount of your debt you owe to your issuers. Also, that low or 0% interest rate would not be there forever. Remember, that advantage is only available for the first few months after you sign up and once that grace period is over you have to answer to your card issuers for the debt you owe them. Think of it as this way, this is a challenge between you and your credit card issuer. One in which you have to pay up your debts before the grace period ends, and if you do then you win and you would have settled your financial issues by then. Otherwise, then your issuer would take advantage of your remaining debt and apply the credit card`s normal interest rate to increase the amount you owe them even more. And be warned that your new credit card issuer`s rate could often be higher than that of your old one. So it is practically a race against time and money that you have to settle your debts before the grace period ends. So if you are the type of consumer who prefers settling your debts instead of using your money for purchases and what else, you could use this system to your advantage.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When Amazon.com was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading

How Much Do Shell Cards Really Save on Gas?

By Allison Martin, Posted: April 20, 2016

There is an endless amount of gas cards on the market, and practically every major gas station, including Shell, has options to choose from. In fact, Shell offers two options for gas cards for consumers. Continue reading