Can I Settle Credit Card Debt from a Balance Transfer?

Debt settlement is often an option for various types of debt in Georgia, including credit card debt. Having credit card debt is extremely common in Georgia, and data from the Federal Reserve suggests that delinquency rates are rising. In other words, more people are defaulting on credit card debt. When you do not make at least the on-time minimum payment for credit card debt for three months, you are usually considered to be in default or delinquent. The Federal Reserve data not only shows a recent rise in delinquencies, but it also suggests that this trend will continue.

Often, if you are struggling to repay credit card debt on multiple accounts, a balance transfer offer can seem like a good idea. With a balance transfer, you can consolidate higher interest credit card debt into one lump sum on a credit card. When you do so, you can often have 0 percent APR for a certain period of time, or a much lower interest rate. However, once your balance transfer debt becomes due, you can again find yourself at risk of default. You may be wondering: can I settle credit card debt that I now owe from a balance transfer? The answer is often yes. Our debt settlement lawyers in Lilburn can tell you more.

Understanding Balance Transfers on Credit Cards 

What is a balance transfer, and how does it result in new credit card debt? As NerdWallet explains, a balance transfer is “a transaction in which you move debt from a high-interest credit card to a card with a lower interest rate.” The process quite literally involves transferring a debt from one or more credit cards to another. The idea is that a balance transfer will make it easier to pay off your debt over time since you will not be paying huge sums in interest each month.

However, when a debtor who does a balance transfer is struggling to make even minimum payments on the transferred balance, they can go into default.

Settling Credit Card Debt from a Balance Transfer 

If you are behind on credit card payments — whether those payments are associated with a range of separate charges or a balance transfer, or both — you can often negotiate a debt settlement agreement. To be clear, the credit card company is not likely to be so interested in how you accrued the debt you owe. Even if you now have an amount of debt on a credit card because of a balance transfer, it is still credit card debt.

Accordingly, if a credit card company is open to a debt settlement negotiation, you may be able to settle debt from a balance transfer. You will typically need to plan to pay a lump-sum portion of what you owe, at which point the credit card issuer will agree to forgive the remaining debt.

Contact a Georgia Credit Card Debt and Debt Settlement Lawyer 

For Lilburn residents who are struggling with debt, taking advantage of a balance transfer offer from a credit card company often seems like a good idea. However, as we discussed above, even this debt may be difficult to repay once it comes due, and you may end up in default. In such circumstances, you may be able to work with an experienced Georgia debt settlement attorney at Konn Law Firm LLC to negotiate a debt settlement agreement with the credit card company.

Sources:

nerdwallet.com/article/credit-cards/what-is-a-balance-transfer

federalreserve.gov/econres/notes/feds-notes/predicting-credit-card-delinquency-rates-20250228.html