Beware the Credit Card Balance Transfer!

Credit cards are the Devil.

(numbers are hypothetical. insert your own to accurately evaluate the sitchy-ation).

Suppose you have $10,000 on a credit card with a 19.99% interest rate that you desire to transfer to another card in order to pay it off at a lower interest rate.
Your second credit card has a $5000 balance, 9.99% rate, and still enough room to receive a balance transfer. The transfer will be subject to a $150 fee and a 3.99% fixed interest rate.

So you do the transfer. Your second card now appears as follows:

• $5,000 at 9.99%
• $150 at 9.99%
• $10,000 at 3.99%

Now here's the kicker. When you make your monthly payments, the credit card company will apply them to the transferred balance first. So in this scenario, your $10,000 will be the only thing getting paid. The other balances at 9.99% will remain untouched and continue to grow at a compound rate!

Therefore, before you do a balance transfer, do this:

1. Read the fine print
2. Run the numbers on a good online financial calculator, knowing how the payments are applied, so you can see how much you'll pay over the long haul.
3. Transfer to a card without a balance if you can.

And, last of all: GET RID OF ALL CREDIT DEBT! NEVER BORROW AGAIN.