Some credit cards offer excellent 0% interest free periods, where after balance transfering from one credit card to another, there are no fees for a period of time. One of the best balance transfers is almost 3 years at present, however it can lead people into financial trouble in the future. Credit card debts can cause financially difficulty but there are other options to resolve these money worries.
Once the interest free period comes to an end usually you could try and get another deal with another credit card company and pay the balance transfer fee. The transfer fee is a percentage of the total amount being balance transferred.
If you can’t get a balance transfer because you’ve used the introductory offer before or your credit score isn’t high enough, then you would be forced to pay the interest on the existing debt. It’s here that debt problems occur.
Credit Card Debt Problems
The RBS has conducted research which found that 37% of people thought they would be able to balance transfer and clear the debt, but were then unable to do so. This meant they had to repay the outstanding balance with the interest rate included, or find another interest free free card.
The research also uncovered that 57% of people didn’t realise what their interest rate would be once their interest free period was over.
If you have credit card debt then the interest free period could help you clear the debt so you don’t need a debt solution. A debt plan would be helpful if the debts won’t be cleared in time for the interest free period being completed, or if you have multiple debts with different companies and are struggling to manage the repayments.
There are various debt solutions including a token payment plan, debt management, trust deed, IVA or bankruptcy which can help with debt problems. If you would like help with your credit card debts call our charity on 0800 085 0226 or complete the debt test below.