Many people in Tennessee and across the country are currently navigating challenging financial issues. How swiftly and completely one is able to resolve his or her financial problems depends on various factors. It is always a good idea to explore available debt relief options when a problem arises, but that does not mean every option would be beneficial in a particular set of circumstances. For instance, some people apply for balance transfers to resolve credit card debt but wind up in worse financial shape than they were before.
What is a balance transfer?
A balance transfer is a financial tool that enables a person to transfer a portion or all of his or her credit card debt from one card to another. The new card issuer then pays off the balance on the original card. The new cardholder then makes payments to pay off the balance transfer.
The main benefit of securing a balance transfer is supposed to be that the cardholder will be able to get a lower interest rate. A lower rate means that more of his or her payments will go toward the principal debt or loan. Things do not always go the way a cardholder thinks they will, however.
What can go wrong?
If a person plans to apply for a credit card debt balance transfer, he or she will want to thoroughly research the process first. For instance, many people forget to ask what their new interest rate will be, which might mean that they are paying the same rate or even, a higher rate than they were on their original card. There are also scammers who promise debt relief but do not follow through. Before applying for a specific type of credit card debt relief, it is a good idea to seek recommendations from someone who is well-versed on legal issues such as bankruptcy, creditor harassment and other important topics.