Limit on Number of Balance Transfers?

Ljmsu on 14/08/2018 - 20:42

Hey all

I've made some … unwise decisions in my life, and I'm currently trying to get on top of my credit card debt.

I'm wondering whether any has come across a limit on the NUMBER of balance transfers that you can have active on a card any any one time?

It seems like such an obvious loophole otherwise… If you had 5k debt on a card, just get approved for $1 on another, then balance transfer back and forth until you're paying only balance transfer rates on all your debt.

There's got to be a reason this doesn't work, right? Or… does it work, and most people just don't do it?

Financial Credit Card

Comments

  • zonra on 14/08/2018 - 20:47
    +1

    How does one transfer a 5k debt onto a card with $1 limit?

    Also, assuming they somehow let you do that, after attempting to apply for cards after cards your credit score will be so low you won't be able to actually get approved for anything.

  • Froot Loops on 14/08/2018 - 20:57
    +1

    Mmm. Cash advance fees. Maybe get more work and pay it off. Most people have been there before and honestly, just pay it back as soon as you can. No point of getting into more debt and then having to deal with a bigger mess down the road. If you really are finding it hard to pay, talk to your bank. I did that when I was 18 and they made a plan with me

  • azvc on 14/08/2018 - 21:02
    +4

    Hey, it's good that you've made the decision to overcome your credit card debt.

    Rather than going straight for balance transfer, I'd suggest you contact National Debt Helpline, they offer free financial counselling service to help tackle debts. http://www.ndh.org.au

    I'd also recommend reading Barefoot Investor, the first couple of steps should help you get back onto your feet and start moving forward.

    Best of luck

  • Brainwhacker on 14/08/2018 - 21:23

    The amount you can transfer is usually based on 90% of the credit card limit; this may differ based on provider. Try and go for 0% and fee free transfers. The number of credit cards and overall limits impact on the credit rating so it will work against home loan applications etc;
    +1 for the recommendation on the Barefoot investor; Spending has to be less than income; Wishing you all the best with the debt reduction.

  • Easton on 15/08/2018 - 09:42

    If you're in genuine financial hardship, you could request a hardship variation, which the banks are legally obliged to consider.

    When I lost my job in the past and was between jobs, Latitude (28 Degrees) changed my interest rate to 0% and reduced my monthly repayments for the life of the debt. It remained on 0% even when I managed to get another job.

    Citibank similarly also changed my debt to 0% for the life of the debt and gave me two years without needing to make any repayments at all (they called it a 'repayment holiday'). When I finally did get another job, they let me pay just half the debt back in a lump sum and considered it settled in full.

    Bankwest didn't want to give me more than 3 months of hardship assistance despite being on Centrelink at the time. I eventually went to FOS and they made a resolution that Bankwest would close my card and would have to pay me several thousand dollars for not meeting their legal obligations in relation to hardship variations and responsible lending.

    There was no impact to my credit report for any of these actions. After I got another job, Bankwest approved me for another credit card.

    • HighAndDry on 15/08/2018 - 12:16

      After I got another job, Bankwest approved me for another credit card.

      So apparently you learnt absolutely nothing. Honestly - it's stories like yours that make me think banks are doing the right thing by sticking to their legal rights as much as possible.

      • Samsungnote10 on 15/08/2018 - 14:26

        Credit cards aren't evil

        Its how they're used.
        Are you saying that a bankrupt should never have a credit card again?

        • HighAndDry on 15/08/2018 - 15:07
          +1

          My problem isn't with credit cards - they're fine. My problem is with the above commenter feeling they're entitled to have debts forgiven and access to other people's money to use as their own without consequences.

        • Easton on 15/08/2018 - 15:21

          @HighAndDry:

          What do I need to learn? There were unavoidable large medical expenses I incurred just before and during my unforeseen period of unemployment (i.e. the company went broke). I otherwise spend within my means and I've been paying my credit card balances in full every month for several years now without fail since regaining employment.

          As for debt forgiveness, with Citibank, I didn't ask them for it in the first place. When I applied for the hardship variation, they were the ones that encouraged me to call them up if I could pay it in a lump sum and they'd forgive half of the debt - i.e. that was their preferred outcome.

          With Bankwest, I had only asked FOS to get Bankwest to extend my hardship variation whilst I was still on Centrelink. FOS themselves decided to rule that Bankwest needed to provide compensation - I didn't ask for that to begin with.

        • HighAndDry on 15/08/2018 - 15:24

          @Easton:

          How convenient. On 3 credit cards?

        • Easton on 15/08/2018 - 15:43

          @HighAndDry: Yes, on three cards. What difference does it make that it was over three cards?

          Latitude gave me a hardship variation but they didn't suggest any debt forgiveness and I didn't ask for it. I paid them back the full amount of the debt.

        • HighAndDry on 15/08/2018 - 16:26

          @Easton: I just find the timing and facts coincidental. Still, if that was the case then shrugs I guess fair enough.

        • Eeples on 24/08/2018 - 23:10
          -2

          @HighAndDry:

          How incredibly kind of you.

          Not sure why you think you are entitled to sit on judgement on others and call them liars.

          Hardship variations and FOS are there for a reason; perhaps you are unaware of the Royal Commission into banks.

          Thanks Easton for sharing and I apologise for the rubbish directed at you by others.

        • HighAndDry on 27/08/2018 - 10:34

          @Eeples:

          Not sure why you think you are entitled to sit on judgement on others

          And

          and I apologise for the rubbish directed at you by others.

          Probably shouldn't be coming from the same person, much less in the same comment.

          Hardship variations and FOS are there for a reason

          That reason being people are apparently bad at budgeting or long-term (or short-term) planning. Have I mentioned I'm a fan of personal responsibility?

  • dazweeja on 15/08/2018 - 10:45

    Keep in mind that balance transfers are exactly how people end up in huge credit card debt. They clear one card by shifting the balance to another, and then the debt on the cleared card grows again and they end up with twice the debt.

  • Eeples on 24/08/2018 - 23:12

    I think plenty of people do that but lately many lending institutions charge an establishment fee for the balance transfer; so it can make it less attractive.

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