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The Dangers of Bank Transfers
Minneapolis Bankruptcy Attorney
For many indebted Americans, the promise of a low APR balance transfer seems like an ideal way to get relief from soaring credit card bills. Unfortunately, this is largely a short-term solution that often hurts you in the long run. In many cases, those considering balance transfers are better off filing for bankruptcy with the help of a Minneapolis bankruptcy attorney, rather than stacking up more debt with the help of balance transfers.
Here are some things you should consider before falling into the balance transfer trap.
- The length of time the reduced interest rate applies. Reduced APR rates generally only last for 6 to 12 months. In many cases, the new interest rates after this period are much higher than those you were previously paying. If you don’t think you could actually pay off the full balance before this time period runs out, you’re probably better off speaking with a Minneapolis bankruptcy lawyer.
- The rules associated with the rate. Aside from the short rate periods, many card companies also include an array of rules that make the prospects of balance transfers even less attractive. If you are rarely able to pay your bills on time as it is, you’re likely going to have trouble making payments on the transfer on time every month. Unfortunately, if you are late on these payments, your rate may skyrocket. In these cases, it is far more advantageous for you to simply hire a Minneapolis bankruptcy attorney to help you file Chapter 7 or Chapter 13. The companies may also require you to make new purchases on your card every month, further increasing your debt or may even retain the right to increase the rate whenever they see fit, which means you might not even get your intended 6 to 12 month grace period.
- The balance transfer fee. Most card companies charge a fee of 3% or more on balance transfers. In many cases, this means your transfer will end up costing you more than it would to leave the balance on your current, higher interest card.
If you are considering using a balance transfer, it may be the sign of serious financial worries that will not actually be improved with this short-term solution. In most cases, it is far more advantageous to call The Law Office of Miinneapolis Bankruptcy Attorney and start working with a skilled Minneapolis bankruptcy lawyer.