December 14,2006
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The Transfer Trap
If you have more credit card debt than you'd rather, you've surely been tempted to transfer – balances, that is. Credit card companies promise low – or – zero APR balance transfers, but they may not always be the best option for you. If you have debt on one or more high interest cards, it can be really beneficial to transfer to a lower APR card, but only if you have resolve.
It can be too tempting to charge more beyond your transferred balances on your new card, or, worse – spend up your newly paid off cards from which the balances were transferred! Balance transfers are most effective in cutting debt when you are able to may them off before the low/no interest introductory period ends.
If you don't have the strength to stop charging, stay away from balance transfers. Consider hitting your budget hard, and cutting out such unnecessary expenditures as dining out and Starbucks runs. Consider getting a part-time job, if your schedule permits, and dedicating that paycheck to your credit card bills. Do the old "cutting up the cards" ritual, and pay for all new purchases with cash (or a debit card).