Throughout the past decade, credit card debt has been almost impossible to avoid for many of us. Financial recession and war have caused the loss of jobs for many and even caused several consumers to foreclose on their mortgage. However, it seems like things are finally starting to get better. More and more people are finding good, high paying jobs and starting to regain financial stability. As a credit card debt consultant, I am often asked, “Are balance transfer credit cards a good debt relief option?”. I generally answer this in one of three ways depending on the level of debt the consumer is dealing with.
Are Balance Transfer Credit Cards An Option For Those Dealing With Financial Hardships?
If you are in a position of incredibly overwhelming credit card debt, this is not the option for you. The truth is, to qualify for any balance transfer cards that are worth while, you will have to meet very specific qualifications. You’re going to have to have good or excellent credit scores and your total revolving debts would have to equal out to less than 10% of your income. I don’t want you to worry though, this isn’t the only option out there other than bankruptcy. I won’t let you get to that point. Now, let’s talk a little bit about financial hardship programs…(I addressed this topic in a guest post for Top Finance Blog a bit ago, click here to learn more!)
What About Consumers Who Just Want Lower Interest Rates?
Well, they may be an option. Depending on your credit score and debt to income ratio, this might just be a good idea. But…let’s think about this first. Do you like the lender you work with? Have you made payments on time every time for at least the past year? If so, your lender likes you too. You never know, you could call your lender and say something like, “Hi, I keep getting these balance transfer credit card promotions in the mail, I like you guys but, the long term rates look pretty good. Is there anything you can do to make it more appealing for me to keep my account with you?”. About 60% of the time, your lender will be willing to reduce your interest rates as long as you are the model customer for them. Would you like to try this first?
Are Balance Transfer Credit Cards A Good Way To Consolidate Multiple Debts For Easier Management?
They absolutely are. Depending on your debt to income ratio and your credit score of course, this really could be the option for you. I know how hard it can get to manage multiple accounts and to be honest, I made the same move a few years ago. Are you sure that you can afford your debts and continue to be able to pay for them? If so, let’s do a bit of market research to see if there are any accounts that can meet or beat your lowest interest rate account on a long term scale. We’ll look at the terms and conditions and do a bit of research on the lender to make sure that you are starting a relationship with a trustworthy partner. If all adds up, we’ll have your debts transferred within the next week or two!
There Is No Such Thing As A One Size Fits All Debt Relief Option!
No matter what type of debt you are trying to get rid of, from mortgages to credit cards, there is no such thing as a one size fits all option. The truth is, everyone maintains their own unique level of financial stability, even when in debt! Before choosing one option over the other, it’s best to do research on several of them. You can also go to your local bank and talk to a banker about options. They are usually full of great information!
About The Author – Joshua Rodriguez
Hey I’m Joshua Rodriguez. I’m the proud owner of CNFinance.com and an avid personal finance freelance writer. This article was inspired by my most recent series, “Balance Transfer Credit Cards – A 7 Step Guide To Understanding This Option”. Join the conversation about this article, my series or the personal finance topic of your choice on Google+!