Using credit to pay off debt is always a bad idea. However, many California consumers buy into this so-called “strategy,” and they sometimes even experience temporary success with their schemes. Yet, ultimately, building more debt to pay existing debt just doesn’t work. Often, consumers in California who use credit cards to pay credit card bills do so in creative ways. Although, no amount of creativity can prevent credit card debt from eventually catching up with consumers. Unfortunately, when it does, it often puts a dent in their finances and damages their credit scores.
Creative Ways in Which California Consumers Try to Pay Off Credit Cards with Credit Cards
California consumers often receive credit card advice from friends, family members, and co-workers. Sometimes this advice is good, but it isn’t always helpful or even safe. When it comes to paying off credit cards with credit cards, there is no viable plan. However, these are the most common ways in which credit card users in California try to make this tactic work.
They use cash advances.
Yes, it is possible for a California consumer to get a cash advance on one credit card, then turn around and use this money to put toward another credit card balance. Yet, this practice isn’t advised. Normally, credit card issuers charge higher interest rates on cash advances. Therefore, not only does this maneuver build more debt, but it builds more expensive debt. Eventually, consumers in California who pay credit card bills with cash advances must deal with the other, bigger problem they inevitably create.
They build debt while paying off other debts.
In order to pay off a credit card with a particularly high interest rate, some California consumers throw all of their available cash toward the balance. While doing so, they pay for basic living expenses with another credit card. So, yes, they can usually pay off one credit card balance with this plan, but they’re left with a high balance on another credit card – or multiple cards. In the long run, this “strategy” usually results in an endless cycle of debt.
They use balance transfer credit cards.
This is the only tactic out of the three listed that can actually work, but it takes discipline and, typically, a good credit score. Sometimes, consumers in California with heavy credit card debt qualify for balance transfer credit cards. These credit cards normally come with 0% interest for 6-18 months. So, technically, you can transfer high balances to these cards, pay them off, and save money. Yet, you must pay them off quickly. Otherwise, the normal interest rate kicks in, and you are, once again, paying interest charges on heavy credit card debt.
The Best Way to Pay Off Heavy Credit Card Debt in California
For most consumers in California, the best way to pay off credit card debt is to reorganize budgets in order to free up more cash every month. Take this extra cash, and pay down heavy balances gradually, while keeping up with other bills. Soon, your credit scores should improve because lowering credit card balances improves your credit utilization ratio.
This ratio, expressed as a percentage, refers to how much of your available credit you use at any given time. Your credit utilization ratio makes up about 30% of your credit score. Ideally, when working to build a good credit score, consumers in California should keep their credit utilization ratios at or below 30%.
How California Consumers Can Protect Improving Credit Scores by Regularly Checking their Credit Reports
While paying down high credit card balances and improving their credit scores, California consumers should check their credit reports on a regular basis. This way, they can make sure that credit report errors don’t inflict unnecessary damage on their growing credit scores. Unfortunately, creditors and the credit bureaus frequently make mistakes by mishandling consumer information. Then, these careless mistakes turn into errors on California credit reports.
Luckily, though, California consumers don’t have to put up with credit report errors or the credit score damage they often cause. The Fair Credit Reporting Act (FCRA) entitles all consumers to accurate, error-free credit reports. However, you must find and report inaccuracies on your credit reports in order to demand their removal.
So, every 12 months, go to www.annualcreditreport.com, and request free copies of your credit reports from the three major credit bureaus (TransUnion, Equifax, and Experian). Under the Fair and Accurate Credit Transactions Act (FACTA), this is your right as a U.S. citizen, so take advantage of it.
Then, if you find credit score damaging errors on any of your credit reports, contact Credit Repair Lawyers of America in California. When you trust our firm with your credit issues, our credit pros will handle the dispute process for you, from start to finish. In addition, you’ll have access to an experienced credit attorney who will get you clean credit reports no matter what it takes – for free.
The Free and Legal Way to Get Better Credit in California
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (916) 438-9400 or sending him a message through our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/california/credit-repair-ca/.