Photo of attorney Brent Wootton

Take Control
Of Your Future

Get out of debt and plan for what's next.

PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our bankruptcy clients the ability to meet with us in person, via telephone, or through video conferencing. Please contact our office to discuss your options.

Bankruptcy Help For Everyday People

A balance transfer isn’t a real debt solution

On Behalf of | Oct 5, 2023 | Credit Card Debt Relief |

Credit card companies are often eager to convince their clients to carry as high of a balance as possible. They make money off of that balance. Those who pay their balance in full every month may not be particularly profitable for a credit card company.

One way credit card companies attract new customers or get existing customers to increase their balance is to extend a promotional balance transfer offer. Credit card companies may offer low rates to those who transfer a pre-existing credit card balance from another card. While those terms may be attractive, they often set people up for a more dire debt situation.

Balance transfers increase someone’s debt

Many credit card companies assess a fee to transfer a balance. People may either pay a flat fee or a percentage of the balance they transfer to the company. The transfer may still seem like a good idea because of a promotional interest rate. However, such interest rates often only last for a year or so.

At the end of that low-rate or interest-free introductory period, someone will have to pay interest on the balance. The company might even retroactively apply the higher interest rate to when the transfer first occurred. People can end up with hundreds of dollars in fees and interest all at once after making months of payments.

Balance transfers truly only help people temporarily free up money on one account and often worsen their overall debt level. The discharge available through personal bankruptcy is often a more effective way to eliminate credit card debt. Knowing how certain so-called debt solutions may worsen someone’s problem could help them choose better options when struggling with financial challenges.


FindLaw Network