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According to Lendingtree, Americans have over $1 trillion in credit card debt. The average

American has around $6,500 in credit card debt. When you factor in the high interest that credit

cards charge, it can be a daunting task to get the balance to zero.

Many cards offer 0% APR on balance transfers for certain length of times. But is it worth it if

you don’t plan on paying off the entire balance during the promotional period?

Wendy Habegger, PhD, senior lecturer in the James M. Hull College of Business, said you

need to be careful when taking advantage of such offers.

“The benefit one would get in this situation is short-lived,” said Habegger. “While one might

enjoy no interest for the promo period, when that period is over, the interest rate they are

charged could be more than the credit card from which they transferred. My recommendation

is that if one does a balance transfer, then only do so if you are able to pay off the balance

before the period ends.”

Some may think of doing a second balance transfer but Habegger said that it is not a good idea

and could have a negative impact on a person’s credit score. It also gives the appearance the

customer is at increased risk of default, which could trigger an even higher interest rate and

higher fees.

Not only may one incur higher rates, it could certainly impact their credit score, which can have

a long-lasting financial impact.

Even a large purchase on a 0% APR card will affect someone’s credit score.

“A large purchase indirectly impacts one’s credit score based on credit utilization,” she added.

“If one uses more than 30% credit utilization, it could impact credit scores.”

Personal debt and credit are trending and important topics in America today - and if you're looking to know more, we can help.

Wendy Habegger is a respected finance expert available to offer advice on making the right money moves during volatile times. To arrange an interview, simply click on her icon now.