Why Balance Transfers Won’t Work | Debt Consolidation Part 4

Debt too big for credit cards

Don't fall for credit card balance transfer offers.

If you are still reading this debt consolidation series, you probably have a sizable amount of debt. By that I mean, you can’t just transfer the balance from one credit card to another credit card and be done with it.

But maybe you’ve gotten several credit card offers saying you can pay no interest on balance transfers for three months or six months.

Don’t fall for balance transfer offers

Maybe you’ve thought that if you got enough of those cards to transfer all of your balances you could save yet. Worse yet, maybe you are trying to figure out how to pay off all of your other bills with credit cards.

Unless you have a bill that’s sitting at a collections agency and threatening to double or quadruple, you will likely end up paying a lot more interest on  your bills if you slap them on a credit card, free balance transfers or not.

Why not?

Unless you have only a small amount of debt, the “free balance transfer” scheme won’t work. First of all, those balance transfers will only last a few months. Then, you’ll be right back where you started as far as paying interest.

However, in terms of your credit report, you will only wish you were back where you started. Getting lots of credit cards does significant damage to your credit report. So, if you’re trying to sign up for new balance-transfer cards every few months, eventually you are going to start getting rejected.

Bearer of bad news

Furthermore, I hate to say it, but if you have enough financial baggage to be considering debt consolidation in the first place, it is probably already too late for you to qualify for these credit cards.

How much you owe compared to how much credit you have is the main factor behind your credit score. If you have incidental bills that didn’t require credit to incur, like medical bills, and you have maxed out more than one credit card, your credit’s probably not in good shape.

But, do not despair. Debt consolidation can help you get back on track and headed toward credit repair.