Dave Ramsey and other popular financial pundits are fond of saying things like “You can’t borrow your way out of debt!”
The advice is to those that would like to open up a new credit card for a balance transfer, or get a new home equity loan or home equity line of credit in order to pay off their current debts.
And generally speaking, borrowing money to pay off borrowed money is a losing game.
Their advice is for those that can’t handle the financial responsibility of paying off the debt and spending less than they earn at the same time.
If you continually spend more than you earn, no amount of balance transfers or new lines of credit will save you.
Since many people calling into the financial shows can’t handle that responsibility (they are up to their eyeballs in debt currently, right?) the advice points against this strategy.
However, that doesn’t mean transferring a balance from one credit card to a new one is always a bad idea.
If you are smart about how you handle the balance transfer it can actually save you thousands of dollars in interest and result in you being debt-free a lot earlier than you would have been otherwise.