Are Credit Card Balance Transfer Programs Worth It for Debt Relief?

The path to debt relief can be a long one.  That’s precisely why so many people look to options like the popular credit card balance transfer program.  The quick fix solution draws people in with the hope of quickly becoming debt free with a simple transfer.  Unfortunately, many people are uninformed about the other side of the credit card transfer, and as a result, they enter into these agreements and end up doing more harm to their credit than good.  It’s important for the consumer to become familiar with the downside of the credit card balance transfer.

What Are the Risks of the Credit Card Balance Transfer?

Let’s take a common example and call her “Sue,” Sue decides it’s time to take advantage of a credit card transfer offer she had been considering.  After being laid off for months, she’s gone as far as she can in stretching her savings to pay off her debts.  She worries that those debts appearing on her credit report could affect her job prospects.  She feels that doing something is better than doing nothing, so she decides to accept the credit card balance transfer.  What are the risks?

A Higher Interest Rate

If she doesn’t have the best credit or has a brief introductory rate period, she will have a higher interest rate.  Higher balance interest rates are the norm.


Balance transfer fees are instantly assessed once the offer is accepted.  The higher the debt, the higher the fee.  On top of that, there is the annual fee that must also be considered.

Credit Impact

Credit score will suffer immediately if the balance exceeds 30 percent of the limit.  Too little credit available credit on the card is damaging.

Minimum Payments

Higher minimum payments are also a risk.  The new, nearly maxed out card will require a higher minimum monthly payment.

She runs the risk of falling further behind on her debt because of the hidden risks of the credit card transfer program.  The better alternative would have been enrollment in a debt relief program.  Participating in this type of program could have actually saved her money in interest, fees and penalties while improving her cash flow.  Some of the fees could have eliminated and renegotiated by the credit counseling specialist.  She can build her credit, lower her total amount owed, and pay off her debts more quickly if she had enrolled in a credit counseling or debt consolidation program.

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