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Balance transfer offers may not solve overwhelming debt problems

Credit card companies offer consumers various ways to reduce the interest they accumulate on their debt. These companies realize that many people are finding themselves facing overwhelming debt, which provides an opportunity for the credit card companies to gain new customers by offering zero percent balance transfers. Although many times this will help consumers looking to reduce their interest payments, there could be some situations when zero percent balance transfers are not the best option in Texas or in any other state.

One reason consumers may choose not to pursue a zero percent balance transfer offer is because applying for a new credit card can reduce an individual's credit score. However, the decrease is usually only temporary. On the other hand, if a person is looking to apply for a home loan soon, it may be a good idea to refrain from applying for a new credit card.

Another aspect to consider is whether or not any fees will be charged for transferring a balance from a consumer's old credit card to a new card. Almost all zero percent balance transfer offers will charge some type of transfer fee. Most in the credit card industry will charge a fee of about three percent. Although this may still be lower than standard interest charges on remaining balances for most credit cards, consumers with low balances may choose to pay the remaining balance in full rather than pay the transfer fee.

Despite making the best efforts to be rid of overwhelming debt from credit cards, many consumers in Texas will still find themselves in financial trouble. However, there are definitely options for those who are struggling with credit card bills to obtain relief. One common option is to file a Chapter 7 bankruptcy, which has the power to potentially discharge all of an individual's credit card debts if they qualify for this type of bankruptcy protection.

Source: NBC News, Before you get that balance transfer credit card, consider this, Rob Berger, Dec. 11, 2013

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