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Your Credit and the Holidays

Where to go for mortgage and debt help

What You Should Know About Debt Settlement

Create a plan to deal with medical debt

Options for Higher Education

Back-to-School Strategies for Staying Out of Debt

Will Changes in Credit Reporting Affect You?

What to do if your medical bills are turned over to collections

What to do if your spouse can't pay his or her bills

What to do when a family member ruins your credit

Homeownership is possible

What you need to know about the IRS and collection agencies

Will being turned down for a store credit card hurt my credit?

Beware of credit repair

Debt Management versus Debt Settlement

How to get ahead of late fees

Is There a Service That Helps You Not Pay Bills

Is a Debt Owed

Patience is the key to furnishing a new home

How to split expenses with your partner

Will my boyfriend's bad credit affect me?

Tax filing options to consider

What to do if your account is turned over to collections

Celebrating Valentine's Day on a budget

Personal Credit and Starting a Business

Finding Money to Reduce Your Debt and Improve Your Credit

Simple Keys to Personal Finance

Be vigilant to avoid telephone and internet scams

Debt Settlement

Understanding credit utilization

Setting New Year's goals that you can keep

The pros and cons of skipping a payment

Strategies for Financially Surviving the Holidays

Creating a fun and memorable holiday on a budget

Keep an open line of communication with parents about their finances.

Make a Choice to Get Ahead Financially

What to do when a relative asks you for money

Should You Buy a Home Now or Wait?

The difference between debt settlement and debt management

Tax Refund Delays for some in 2017

The negative impact of paying a payment 30 days late

Stressed by Finances

How to navigate two significant financial decisions: starting a family and buying a home

How to advise someone close to you who is coming into a significant amount of money

Make a Conscious Decision on How to Spend Your Money

Tips for Back-to-School Shopping

How do you know if you have a good credit score?

Americans spend more money eating out than on groceries

Having Good Credit Saves You Money

Developing good money habits with your first job

How to save for a home

How to Know if you are Ready for Home Ownership

When is the right time to buy a home?

You can improve your credit to buy a home

Plan a Memorable Vacation Without Incurring Debt

The Hidden Costs of Payday Loans

Be Wary of Credit Repair Services

Use Caution when playing the credit card game

What does it mean to say bankruptcy gives you a clean slate?

How your credit is affected by various debt options

Be wary of predatory small business loans

What to do if you fall behind on mortgage payments

Financing a College Education

Money, Credit and Relationships

Should you be concerned with your date's credit scores?

Best options for a small, short-term loan

How to help a relative who is always borrowing money from you

Setting New Year's goals that you can keep

Making the holidays memorable for families on a tight budget.

Skipping a Payment over the Holidays

What to do if you are overwhelmed by medical bills

Make your financial intention a financial goal you can achieve

Should Consumers Use the New EMV Cards?

What to do when a collector calls you

The difference between paying bills and managing your money

My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

What do I need to know to pay ahead on my mortgage?

What to do if you get an unsolicited credit card in the mail

What to do when moving in to share expenses doesn't work out

Use Caution when playing the credit card game

Q. I have 2 credit cards right now, one with a balance and one without.  I frequently get credit offers for 0-interest for 12 months, and I’m thinking about transferring my balance to a new card.  I figure I’ll save about $30 a month in interest charges.  Is there a downside to doing this?

A. The answer depends on how long you were going to take to pay-off the balance on your current credit card, whether or not the new card has a balance transfer fee, and what you plan to do with the old credit card when you pay it off. 

I’d encourage you to read the terms carefully before you decide anything. Start by finding out if you will be charged a balance transfer fee. Some cards carry a balance transfer fee as high as 5%, while others do not charge any fees at all.  If the new card has a balance transfer fee, this will be charged on your first billing statement after you transfer the balance.  Does this fee negate any interest you might be saving when you transfer the balance?

Let’s say your current credit card has a balance of $2500, and the new card has a balance transfer fee of 5%.  In this scenario, you will pay a $125 fee.  This is still less than the $30 a month in interest you are paying, assuming you planned to pay off the card over the course of the next year.  However, if you had planned to pay the card off over the next 4 months, you would not save any money, so it doesn’t make sense to move forward with the balance transfer.

Next, you must also consider what you will do with your other card if you pay it off with the balance transfer. If you continue to make purchases with it, then you will not get yourself out of debt, and again, you will end up negating any extra savings you might enjoy with the new card.  If you choose to open the new credit card with your balance transfer, then I’d advise you to cut up the old one.

In so doing, you won’t be closing the account, which would affect your credit score, but instead you are ensuring you will not go further in debt.  If you are concerned about destroying the credit card, put it in a bowl of water and freeze it.  You cannot microwave the frozen card or you will destroy it, so this keeps you from making impulse purchases.  In a few months, when you realize you do not need the card, you may be ready to destroy it.

Ultimately, if you use the new card as an opportunity to stop paying interest and pay off the old one, this would probably be a good financial move.  Still, if you are going to play the credit card game, you need to be careful.  Look at the whole picture, be honest with yourself, and then make sure that the end result of whatever you decide will be in your best financial interest.

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email acce@acce-online.com.

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.