Wealth-Coaching

Credit Cards can be a useful tool if used wisely.  Taking advantage of travel miles or great point rewards on a credit card can be a benefit to any family that pays their credit card balances off each month.

For many credit card holders paying the balance off each month is not the norm.  Unfortunately, many credit card accounts find numerous fees and charges to the point that the account holder can’t catch up.

Once a credit card is at a certain point of delinquency, the card company will ‘charge off’ the account.  This means that they no longer show the account as an asset on their books.  After a period of seven years as a bad debt, the account, most of the time, will roll off of your credit report.

Even though you are morally liable for the debt, legally, after a certain time, the company can no longer hold you to your contract of repayment.  To circumvent this situation, some credit card companies are calling and offering to roll the balance to a new account and bring the other account as paid on the credit report.

Although this sounds like a dream come true, in most cases it is a ploy to reopen the legal obligation to the debt.  However, if you have had the account for some time in a charged off status and have been making payments, this could be an option if you feel that you would like to continue with the company.

If you haven’t made any payments in years this is not a smart choice.  Although paying the debt is still a moral obligation, you won’t be tied to a legal obligation if you choose to forego the new account.

Pay close attention to credit card offers and be sure to get professional advice and set some personal goals before making decisions on moving or changing your indebtedness.  Remember, the best debt is paid debt!