A common method, which has been recommended on this blog for debt reduction, has been to get a new balance transfer credit card and put current credit card debt onto the new card. With some of these cards offering 0% interest for periods of up to one year, this provides a great way to reduce debt quickly because of not having to pay extra money in interest.
Some people like the method so well, however, that they simply keep doing it from year to year, getting a new card each year. While this will help them to enjoy the 0% interest rate – or at least a low interest rate – there is a price tag that is going to catch up with them sooner or later.
For one thing, they really are never learning the value of what it is like to not be in debt. Neither is it teaching them to provide a realistic debt solution so that they can one day be debt free. All they are doing is moving the debt around from one credit card to another.
Whenever you get a new balance transfer credit card and move your debt to it, it does get reported on your credit report. Anyone who looks at the numbers will be able to see what is happening. It also can affect your credit score if you are increasing the amount of available credit that you have. Remember that a credit report is all about showing potential lenders your spending and payment habits. It will affect you sooner or later.
The best way to keep your credit score good and reduce debt is to actually reduce it. This will help you to learn good money management, help you stop making the credit card companies rich from the interest you are paying them, and ultimately enable you to become debt free.