Surfing Cards Or Changing Habits?

Dan asks if surfing credit card balances to get a better rate is a good idea. Dave says it's okay to do it, but the danger is in not changing the habits that caused the debt.

QUESTION: Dan on Twitter asks if surfing credit card balances to get a better rate is a good idea. Dave says it’s okay to do it, but the danger is in not changing the habits that caused the debt.

ANSWER: It’s as easy as switching it in terms of getting a lower interest rate, yes. But that doesn’t pay off the debt. It just moved it. The danger of surfing and getting better rates and moving debt around all the time from one place to another to get a better deal or a better rate is you get yourself emotionally under the illusion that you’ve done something. You haven’t done anything. The habits that got you into debt and the habits that have kept you from living on less than you make so that you can pay off your debt—those habits didn’t change because you changed credit cards. Those habits are your real problem, more so than the interest rate is the problem.

It’s okay to surf a card to a lower rate, but the danger is that you’ve got to change your habits. Ninety-eight percent of the issue is habits. Two percent is mathematics. You’ve got to change the guy in your mirror. That’s why when people take out debt consolidation loans, it’s a complete rip-off. We call them debt con-solidation loans. Debt con-solidation loans comes from the fact that 88% of them—that’s nine out of 10—the people don’t change their habits, and their debt grows back on the other side, and now they’re double in debt. You’ve got to change. When you change, interest rates start to not matter at all.

It’s okay to surf a card, but just don’t feel like you did something, because you didn’t—much.

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