Balance Transfer
July 31, 2008
I just finished watching the news and there was a segment there about paying up your credit card debts. I think the information given by the banker was really helpful, and some people might have overlooked the idea.
So, here’s the thing. There’s this regular employee who has a credit card with 42% annual interest rate. So, the 10,000 that she owed when she bought items for her home increased to 100,000 because of the interest rate. Up to now, she still hasn’t paid the debt in full. So, the banker said that she could do “balance transfer”.
What she has to do is she should find another bank that offers lower interest rate on their credit cards. Use the credit card to payoff the previous loan. In effect, she will have to pay lower than the total amount to be paid to the other bank.
While this move might help you in paying off a credit card debt, it still would not erase your bad credit score. So my take on this, buy only things that you can afford.
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