Student with $2000 credit card debt. Best way to handle?

Question

I am a college student with $2000 of credit card debt. The 0% APR on the card will be ending soon. A friend suggested to open a new card with 0% APR for 6 months (or longer, if possible) and (pending approval), transfer my balance to the new card.

Because of my studies I cannot get a job to pay off the debt until summer, so this seems like a logical solution. However, I feel that the solution cannot be this simple.

Why can this not work? What are the pros and cons of opening a new card and transferring the balance?

Thanks for the quick responses.

I can currently afford to pay the minimum due, but not much more.

Also, I don't really want to ask my parents to lend me the money unless it becomes absolutely and totally necessary...

Answer 1

Transferring balances to a low interest credit card is a widely prevalent practice. But, is every available balance transfer credit card the same? A good look at the offers and you will find that some of them surely standout from the crowd. What makes them different and more lucrative? Here are 5 factors that will help you select a balance transfer credit card that will prove more beneficial than others.

1. Earlier it used to be 0% Intro APR on balance transfers for a specified period, but now it is gone. It is very rare to find a balance transfer credit card with 0 % Intro APR. So, the next best thign is a low APR for balance transfer. There are many credit card which offer balance transfer at APRs ranging from 4.5% to 7% for a limited period and a regular APR after that.
2. It is good to have a low APR balance transfer but if a credit card offers a low APRon balance transfer for a very short period of time, it is better to look for another. Low balance transfer APR for the life of balances is a good option to have.
3. Credit card companies do charge some fees for transfering the balance. This could be anything between 3-5% of the amount transfered. This balance transfer fees increase the cost of balance transfer. So, the ideal situation would be to have a credit card which doesn't take any balance transfer fees.
4. Any balance that has been transferred has to be repaid, now what happens is that if you have done a balance transfer and miss one payment all the goodness of low balance transfer APR vanish and an instant high regular APR sets in. This can prove fatal for all the goodies you expected with the balance transfer. So, wouldn't it be nice to have a balance transfer credit card which offers a grace period on repayment. Many credit card offer such facility and it's definitely good to have one.
5. Good account management options line online account access and fabulous customer support will always help you manage your credit cards with ease. A credit card which offers such services without any extra charge is definitely a plus and should be given a priority.
Read more from: http://www.credit-card-gallery.com/credit_card_balance_transfer.html

Answer 2

Actually bouncing your credit card balance from card to card is a good idea if you are not able to make payments but make sure you transfer the balance to a 0% interest card or you could pay each card each month off with the other credit card that way you do not pay interest you use those checks they send you each month, the charge is only like ten bucks which is better then pay more on interest. But when you are able to make payments I would becuase otherwise you will be in deep trouble down the line and make sure you do not add more to the debt, if you are looking for another credit card with 0% on balance transfers check out www.fastcreditcardapprovals.com

Answer 3

You do have rights when it comes to paying off debt. Its not the case of being sued, they just want payment. Get the address to send the/a payment to and just keep sending what you can. They have to accept waht ever amount you send. Keep track and have them send you a billing statement. The collection agency wants to settle the matter quickly and move on. They don't want to have to deal with accounting issues. They bought your debt for cents on the dollar and want the full amount. The person handeling your account gets paid a commision on the amount he/she collects. He wants a big commision check, not small ones. I am surprised AMEX sold your debt so quickly, they don't "throw" your debt anywhere. How many months behind were you ? You should have not been late more than two consecutive months and paid the minimum. There are many advocacy groups out there to assist you. There might be one on campus. Is there a law school near by ? You bought the merchandise and the merchant wants the money for the goods and services you purchased. You have an obligation to pay up. You are an adult, act like one. How did you run up a $2000 credit card bill ? You need to get a grip on your finances. Make a budget and track what you spend. You are not starting off a sound financial footing. Study more and party less ! Where are your parents in all this ?

Answer 4

You would be better to open a new card to tranfer the debt and during the 0% APR period try to pay off the money little by little. But, make sure that you will not use anymore on the new card and plan to pay it off as soon as possible; dont' wait till the last minute to pay and then worry about another solution to pay.

Or, if your parents have extra money ask them to loan you some money and pay them back when you work in the summer. If you choose to do this one, make sure your parents get their money back when you work and earn $$$, I mean do not forget to pay back. You want your parents to trust you and see you as a responsible son or daughter. :) Good luck.

Answer 5

Opening a new card wont help you. You will only get into more debt as you have shown that you like to spend money you dont have just because its a 0% apr.

Credit cards are for people that have the money in the bank already, but use the cards because they dont like to carry around large amounts of cash. If you dont have the money for it when you buy, you cant afford it.

Why dont you just pay off the debt with some of your debt with your student loan check in January?

Answer 6

I would do that as a last resort. I'd try like hell to pay it off and be done with it. Find a weekend job maybe? Work during Christmas break?

you have to be careful of opening a new card and read the fine print. Just remember that credit card companies make all the rules and can change the rules anytime they want.

I personally don't play the credit card game.

borrower is definitely slave to the lender!

Answer 7

I wish I only had that little bit of debt. Could you not find a part time job, to just pay the min. at least, so that you do not ruin your credit by non payments? Transferring the card will require you to state how much you make and with a job, they could deny you. Also, if you do put you make money, then if you not pay, they'll harass you. I absolutely hate credit cards!

Answer 8

Well, for one thing, the cards charge a substantial fee to transfer a balance from another card.

Don't get into that - pay down what you owe or you'll find yourself in a never-ending cycle.

Answer 9

Not too good with this stuff.
Good luck paying the debt
don't get too far into it

it will screw your life.
I'm living my parents'.