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SmartCredit.com Consumer Education President John Ulzheimer breaks down the pros and cons of the 0% credit card transfer offers you receive in the mai...
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You make it's tons of credit card offers in the mail but you may wonder which one did she -- 0% balance transfer seem to be the answer to your credit card dilemma.
If you have -- high greater near existing card.
But could actually put you deeper into debt here to help -- John Alzheimer president consumer education -- -- credit dot com John welcome great to -- -- That thanks for having me Gerri appreciate it our right so let's talk about is -- -- balance transfer credit cards you know people get fed up with the rate they're being charged.
They -- -- 0% offer they get one in the mail should they take it.
Well these -- percent transfer offers are back thankfully they went away for about a 36 month hiatus.
In the middle the credit crunch and pre card act.
But they are -- back with a vengeance -- if this is a purer financial plight if you are paying.
Any thing in the average interest rate on our credit card these days is about 15% which is pretty doubt even -- that's just the average.
And you get an offer in the -- -- at 0% for twelve months 24 months or even longer in some cases.
And you are disciplined enough to be smart about it and it's not a bad idea but you gotta be able qualify for these these are just these -- was given -- everybody right now what's the potential downside.
Allow arcade a potential downside is just as big as the potential outside the potential downside is you.
You get one of these new cards -- transfer the balance off of not only one existing carpet several existing cards.
And then you go right back in charge those existing cards up again and now higher in debt twice over.
And the balance transfer offers don't come any longer because of the amount of debt -- -- -- But that's my fault that's not the credit card operators -- do that right I mean.
Are -- things I need to watch out for from those credit card operators.
I I'd love your dose of reality Jerry it is always our fault we get into debt no one now stands behind us with -- -- -- says darn it get into that John.
88 lucky you have to be disciplined enough to not.
Get back in this twice over relate the reality is the most consumers and I I don't think I'm exaggerating here are -- are addicted to credit cards and addicted to using credit card and so frankly.
They should have fewer of them and may not necessarily want to keep the old cards open if they do in fact get a balance transfer offer.
That's enticing to them you know you run it through the shredder or keep it open because there's a credit -- benefit -- but at least the -- doesn't exist any longer so it you'd be stolen and it can't be you know.
I remember a time where and when there were rollover fees was actually very dangerous thing to do to roll over debt onto another car even -- 0% card.
Because he didn't really if you may not have understood exactly what you were being charged for the privilege of doing that is that still a problem.
Or -- new federal on credit cards actually change that.
While like let's be real honest about this a credit card issuers are not nonprofit -- they're not altruistic.
-- they're out for the almighty buck so the average balance transfer fee for these types of cards as a shade over 3%.
I'll be problematic yet well keep in mind up about that you might help them pay 29% interest to 0% interest -- -- what -- I can't tell the debt not that that's gonna be dangerous.
It's absolutely expensive to do -- but the long term gain that's the difference between a quick Nicholas slow Donny and actually -- bet you better down the road.
If you do a good job aggressively attacking that debt and then when you come out of that safe harbor -- 0%.
Bigger balances low enough to where the new interest rate which hopefully is lower than it was on the original -- anyway is.
Is something that's at least somewhat manageable look like you've got to be very aggressive during that twelve -- 24 month period and Whittle away at that data as much as you possibly can't.
Or really just nothing but delay the inevitable -- two year are ever gonna Whittle away.
-- -- -- -- All right John thanks for help today really appreciate it.
