For better or worse, I’ve been in the credit card industry for five years. During most of that time, consumers had a wide range of low fixed rate and 0% interest offers available to help them get out of credit card debt. However, during the past six months, just about every credit card company has made it more difficult for consumers to obtain these rates. In my opinion, things will continue to get worse for consumers with credit card debt before they get better. I’ve been writing about this for quite some time, and if you take a few minutes to review some of the older posts on this blog, you’ll see that I’ve been right most of the time.
Unfortunately, consumers actively trying to reduce their credit card debt have a lot less options today than they did one year ago. The reason for this is quite simple: no one wants your debt. Last year, banks fought over new customers, offering 0% rates that lasted for 15 months, no fee balance transfers with 0% rates that lasted a year, and fixed for life rates as low as 2.99%. Today, those lucky enough to get approved for a new credit card can still get a 0% APR for a full year. However, qualifying for these offers is getting more difficult by the day and, in the very near future, 0% balance transfers may not be available at all.
If you are serious about getting out of credit card debt, the first step is to apply for a credit card that offers a 0% APR on balance transfers for 1 year (you can compare offers here). With a 0% interest rate, a person with $5,000 in credit card debt with a 14% interest rate can save close to $750 in interest charges alone. And, although standard 3% balance transfer fees will reduce total savings to $600 for a year, the money you save on interest can be used to pay down your credit card debt instead of paying down newly accrued interest charges.
Failing to take action to reduce your credit card debt will only make matters worse. If, for example, you chose to start getting out of credit card debt one year ago, you could have moved your high interest balance to a credit card with a 2.99% fixed interest rate for life. Today, that is not an option. Tomorrow, getting a 0% rate for a year may not be an option. And as these options disappear, credit card companies continue to raise interest rates on consumers with good credit and long histories with their company.
The behavior of credit card companies towards consumers is utterly abhorrent. Sadly, however, any person with credit card debt is at the mercy of their credit card company. If you are reading this, then you are taking a step in the right direction. The next step is to apply for a balance transfer credit card and secure a 0% rate while you can. Otherwise, you may extend the time you spend in credit card debt hell even longer.
For additional information on available 0% balance transfer offers, please see the appropriate section of this website.
Should you have any questions or comments, please feel free to leave a comment below or contact me directly.
I congratulate you for taking steps to get out of credit card debt, and hope my plea encourages you to take action.
