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Credit card debt in Michigan: Is debt transfer a good option?

After the effects of the recent recession, enticing offers made by credit card issuers to transfer credit card balances to cards with zero or low interest rates could be hard to resist. Michigan credit card holders may want to consider such offers carefully. When one's credit card debt is at a level that causes anxiety, it could be easy to accept offers for very low interest rates, without realizing that one may be worse off in the long run.

Not all issuers of credit cards offer the same advantages, and consumers can be offered either a deal where no fees will be charged on the transferred amount, or the offer may include a charge of between three percent and five percent of the transferred amount. Considering this, the fee on a transferred balance of $10,000, which is usually added to the debt, can be a whopping $300 to $500. Consumers may also find that the reduced interest rate is only offered for a restricted period. One of the conditions normally stipulated for such transfers is that the transferred amount has to be paid off within that specified period. If one fails to do that, interest rates from approximately 10 percent to over 22 percent could become effective.

Another concern may be that if the consumer defaults on just one payment, the special deal may be cancelled and normal rates charged. The amount that the card issuer will allow to be transferred is usually only divulged after the application is approved. If the full outstanding amount on the current credit card was not transferred, one could just end up with another credit card. Consumers are, therefore, advised to do the calculations carefully before merely accepting an offer to transfer.

Michigan consumers who have reached a stage of desperation due to credit card debt may want to research all possible legal alternatives before taking action. Armed with the necessary knowledge, and possibly the guidance of a legal advisor, the credit card holder will be able to make informed decisions about his or her course of action. In addition to the transfer of credit card debt to lower interest rate cards, other options to consider include debt review or the protection of Chapter 7 or Chapter 13 bankruptcy. Choices like these could prove to be the only way to rebuild a secure financial future.

Source: greenfieldreporter.com, 5 things to consider before signing up for a new credit card with a balance transfer offer, Alex Veiga, March 5, 2014

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