Rolling Credit Card Balance Transfers: A Disaster Waiting To Happen

Balance transfers have become a lifeline among credit card holders. This is especially true for credit card holders who cannot get enough of credit. In fact, a number of credit card holders regularly transfer their balances from one credit card to another, effectively rolling their balance to a new credit card every now and again.

Although a lot of consumers in credit trouble follow this practice, there are also a few who are actually well positioned to just pay off their credit card debts who go into the practice of rolling their balance from one credit card to another. Essentially, what happens is that, once they accumulate a large enough balance in their credit card, they look for a new credit card offer, preferably one that offers a limited low or 0% interest rate balance transfer offer and then transfer their balance to that card. Thus, they get to keep their debt in a 0% interest rate card, pay low for that debt and still get to use their old credit cards for regular purchases.

Some credit card holders who do this kind of practice with their credit card debts are smart enough to avoid using their new credit cards with the transferred balance, knowing that this would mean paying off with the the default interest rates and risks triggering the default interest rates for the transferred balance. Instead, they use their old credit card for their credit card purchases. In some cases, credit card holders roll their credit card debt from one card to another in the hopes of paying off all their credit card debts at a lower rate. Unfortunately, many fall for the trap of spending on credit once again while still paying off their debts, lured by the low payments that their balance transfers affords them.

The end result of this kind of practice if the card holder fails to ultimately pay off his or her credit card balance is a continuously ballooning debt which, in the long run becomes an unmanageable financial burden.

These days, card holders who follow this kind of practice are in even worse trouble. Credit card companies have become rattled with credit and 0% balance transfer rates are essentially a thing of the past. This means that, even if they transfer their already large credit card balance to another credit card, these card holders will still be paying comparatively high monthly rates. Credit card companies are also giving shorter grace periods for their lower interest rate offers, typically anywhere from 6 to 9 months.