NORFOLK, Va. - If you have ever been in debt or owed money, you know how stressful it can be.
While statistics show that more people are finding themselves in debt, News 3 is offering solutions to help.
According to LendingTree, one of the most powerful debt-fighting tools available is a balance transfer credit card. A balance transfer credit essentially allows you to move what you owe on one card onto another card without interest, for a limited time.
However, when people hear the worked "limited," they get worried. LendingTree said people believe if they don't pay off their entire balance that they transferred during the 0% period, they will get hit with a bill for all the interested that they would have accrued. Matt Schulz, Chief Credit Analyst for the company, said that's not true.
"So a lot of people believe myths about these cards that make them seem like they're not quite as good a deal as they are. And that's unfortunate because what it means is that you end up having people paying a lot more money on their credit card than they need to and that's the last thing anybody needs to do," said Schulz. "They're keeping themselves deeper in debt, and they're basically shying away from using one of the best weapons in their arsenal to fight credit card debt because of a myth and that's really unfortunate."
It's reported that 15 months was the most common intro period length for bank-issued balance transfer credit cards. 42 bank cards offered that, while 18 bank cards offered 18 months or more.
The Federal Reserve Bank of New York’s Quarterly Household Debt and Credit Report shows that card debt has grown in back-to-back quarters, rising from $770 billion in the first quarter of 2021 to $804 billion in the third quarter of 2021, Schulz said. There will likely be continued interest rate growth in the coming months.
"So the long and short of it is that if you have credit card debt today, it's really important for you to jump on trying to pay that down as soon as possible because that credit card debt is only going to get more expensive for you as we get further into 2022," he said.
Schulz said you can take more control of your debt by signing up for a 0% balance transfer credit card, applying for a low interest personal loan or calling your credit card issuer for a lower rate. While you are not always guaranteed a lower late, LendingTree said about 80% of people who asked, received a lower rate.