The trigger that forces you to finally take the benefits of bankruptcy can come in many forms: unexpected medical bills; mortgage defaults; the implications of divorce. But, more often than not the culprit can come in the form of out-of-control credit card bills. And with good reason: Chapter 7 bankruptcy can virtually wipe all of those bills away with one, simple filing.
In light of this option, in these economic times, credit card companies are working harder about keeping you debt, targeting unwitting debtors with “convenient” features that make it seem like the card companies, themselves, are helping their customers avoid financial ruin. But not only are many of these features useless, they can be expensive, costing you your budget and a bankruptcy.
In particular, here are three so-called credit card “conveniences” that never were:
(1) Convenience Checks
Not unlike checks from your bank account, credit card convenience checks are used in the place of cash (or in this case, credit) to make it more “convenient” for you to make purchases even when you don’t have the actual money on hand. The problem with these checks is that they continue “withdrawing” long after the check has been cashed, working as “cash advances” with interest rates as high as 25 percent that leave you paying for an item for months, and sometimes years, after the actual purchase, and without the normal 30-day grace period. Like most credit card promotions that come in the mail, it’s better to bounce these checks right through the shredder.
(2) ATM Withdrawal Privileges
Similarly, credit card companies now model their cards after convenient debit card usages, supplying pin numbers that can allow you to make withdrawals from plastic much like you would from an ATM machine. But beware these “nifty” numbers that allow cash withdrawals from credit cards as most companies require a minimum fee on all ATM withdrawals, sometimes up to a staggering 50 percent or more of the cash withdrawal amount itself.
(3) Balance Transfers Rates
You may also be receiving constant credit card mail from card companies if you have a balance on another preexisting card. These mailbox pleas come in all forms with the same message: “use our low interest card to pay off your higher interest balance.” And because the language these solicitations use is likely “balance transfer,” versus “borrow” or “loan,” many people just like you take the card companies up on their offer. So, what’s so wrong with a little monthly reprieve from higher interest balances? Well, if you’re not careful…a lot. The balance transfer is, in fact, just another temporary loan from a credit card company. More likely than not, if you’re dealing with credit cards and their high interest rates, you’ll likely be unable to pay the transferred balance before the offer’s grace period—a temporary low-interest rate for balance transfers only—ends. At this point, the cycle of credit card debt begins all over again; this time with two cards to pay for, both with the same high interest rate. Keep in mind, unless you’re a pro at juggling credit card accounts, the balance transfer “game” is better played by someone else.
And, as always, if you are facing insurmountable credit card debt and are wondering how to get back on track, knowing a qualified bankruptcy attorney can also help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or make your appointment online at www.billsbills.com.