All across the country, millions of Americans are still struggling to reduce debt and get their finances in order. And that’s why a movement to transfer credit card debt to new accounts is under way.
A group of consumers has decided that December 11 will be Balance Transfer Day, a time when many people will simultaneously sign up for new balance transfer credit cards in an effort to more quickly reduce their outstanding debt, according to a report from Time Moneyland. The movement comes at a time when many consumers are still dealing with the economic fallout from the recent recession, and with many lenders offering long-term low-interest deals for new credit card customers, now might be the best time in years to seek a balance transfer.
In addition to seeking new credit cards from major lenders, the group is also urging customers who have access to community banks and credit unions to use those as well, the report said.
Currently, most of the nation’s top credit card lenders are offering new borrowers attractive rates – often of 0 percent – on credit card accounts for as long as the first 24 months the account is open, the report said. That means that during this time, consumers will be able to pay down their debt without seeing it increase at all as a result of interest charges, which can save many consumers a considerable amount of money if their current credit cards carry rates closer to 15 or 16 percent.
Of course, experts also caution that weighing the pros and cons of such a move is key, the report said. Many consumers may be willing to transfer their credit card balances so that they don’t have to pay interest for the next year or two, but at the same time, some may not be aware that doing so typically requires them to pay a balance transfer fee, which is usually around 3 percent. For those with sizeable outstanding debts, this can often be difficult to bear in addition covering all other monthly bills.
For consumers who are still dealing with lots of credit card debt, it may be a good idea to talk to a certified credit counselor, who will help to walk them through the various options available to them as they try to get out of debt.