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Possible risks of credit card balance transfers

On Behalf of | Feb 24, 2023 | Bankruptcy Law

The ease and convenience of use are just two examples of reasons why many individuals may feel inclined to use credit cards to fund a variety of purchases. Unfortunately, credit card debt remains one of the most prevalent sources of monetary strain and as time passes, those who struggle with debt may feel forced to sit back and watch account balances soar. While individuals in Maryland may wonder if transferring balances to new credit accounts might be a viable path, there are some risks involved and this may only prove a temporary fix to a growing concern.

Addressing the risks

Balances transfers may seem favorable when interest rates on new accounts offer promotional periods of low to zero interest. However, such offers may only be temporary in nature and if one cannot pay off account balances by the end of a promotion, the results could prove disastrous. There may also be fees associated with transferring balances to new accounts and adding financial obligations to an already difficult situation might not prove favorable.

In some cases, those who struggle to meet credit requirements might not even be eligible for similar promotions and this may be a common concern for those dealing with high levels of credit card debt. Those who struggle to make the minimum payment due on balances may also encounter significant fines and penalties and even one late payment could trigger the end of a promotion. Experts also state that balance transfers could have a detrimental impact on one’s credit score.

Seeking financial relief

While balance transfers may be viable in some scenarios, those who face high levels of credit card debt might benefit most from seeking a more long-term solution. With so much on the line, individuals in Maryland who face dire monetary woes might benefit from speaking with a bankruptcy attorney for advice in making informed choices about their financial futures. An attorney can help a client create a strategy with which to reduce or eliminate debts through the proper paths and guide him or her through every step of the process.