Consolidate Credit Card Debt
Need To Consolidate Credit
You simply cannot open a newspaper, turn on your TV or even browse the Internet without encountering some advertisement or another from a credit card debt consolidation
company offering credit card debt consolidation loans.
So what is credit card debt consolidation? And more importantly, who is likely to need it?
Credit card debt consolidation refers to the process whereby one or more existing credit card credit debts are transferred over
(or consolidated) to a new credit card or cards. The objective of this debt consolidation credit card exercise is to save money by moving from a high APR credit card to a new low or
0% APR credit card. This strategy of consolidating credit card debt is also known as a balance transfer credit card
There are very many credit card debt consolidation services
that provide professional help and advice on how to credit card
debt consolidate. While some people will want to seek outside
help such as credit card counseling debt consolidation or with credit card debt management, others will choose to consolidate credit card debt themselves.
To fully appreciate the benefits of consolidating credit card debt
yourself, we first need to understand the ways in which credit card debt arise. Credit card credit debt can firstly accumulate
with spending and secondly, by the accumulation of interest that is charged to your account on that spending.
These interest charges are calculated using the interest rate or annual percentage rate (APR) that is applicable to your credit card. The lower the APR, the slower it will take for
your credit card debt to grow. Individuals who are credit card-savvy use this to their advantage, to consolidate credit card debt - i.e. balance transfer to a 0% or lower interest rate credit card.
How To Consolidate Card Debt?
One of the first steps toward credit card debt management is to do a low interest rate balance transfer to consolidate credit card debt. Firstly though, you need to understand what constitute
the best credit card debt consolidate offer, at the same time you're
doing your research.
There is certainly no shortage of offers to consolidate credit card debt to. Competition among credit card suppliers are pretty stiff so there are plenty offers with ever tempting incentives to hook you into credit card consolidation with them. But take heed! You must be absolutely certain of the exact terms of any debt consolidation credit cards you're
signing up to.
The low apr or 0% credit card offer period on these cards will generally be for a duration of between 3 to 12 months. It is most important that you take note of the APR - (which is usually the figure that appears in bold).
Before you enter into any consolidation of credit card debt agreement, here are three key things you should look out for: the introductory APR, the introductory APR period
and the standard APR.
If for example you find a 0% credit card to consolidate your existing
debt to, bear in mind that the 0% introductory interest
period or apr will only be applicable for the duration of the introductory period offered. If this is for only 3 months, then expect the rate of interest you'll be charged thereafter to increase to the credit card supplier's standard rate of interest; which will be significantly higher.
If you're carrying a substantial credit card debt and are not in a position to clear your credit card debt within 3 months, the above example would not be a good option for you to consolidate credit card debt to. An example of better debt consolidation credit cards are those offering the lowest possible possible apr (0% apr is best); have a long apr period - 6 to 12 months; and carries a low standard apr after the introductory period has expired.
When you consolidate credit card debt on the above basis,
you can achieve three key objectives. Firstly, you effectively
buy yourself much needed time in which to repay all, or at least most of your indebtedness; while
at the same time slowing the rate at which your credit card debt grows; thereby offering you a an effective strategy for eliminating credit card debt or at the very least, effective debt reduction.
If you feel you're unlikely to have repaid all your debt at the
end of the debt consolidation credit card introductory period and/or that you are unable to secure a debt consolodation credit card with a low enough standard apr, there is absolutely
nothing stopping you from repeating the credit card debt consolidate process with another 0% credit card balance transfer.
Just be sure to do this well in advance of the expiration of your
credit card debt consolodation offer period.
Benefits You Get When You
Consolidate Card Debts
Consolidating credit card debt or balance transfer has a number of benefits. It is up to you to use this benefits to your advantage.
Credit card companies are increasingly making their credit card offers more attractive, with the specific aim of tempting credit cardholders away from their competitors.
The most financially beneficial incentive by far is unquestionably the 0% interest on balance transfers or credit card debt consolodation. It is this type of card you should be aiming to consolidate credit card debt to.
Additional debt consolidation credit card offers can also include incentives and perks such as reward points, credit card cashback, interest free purchase etc., But beware! Remember
that your objective is to consolidate credit card debt.
Your goal is eliminating credit card debt. You will not achieve your goal if you get drawn into interest-free spending after consolidation of credit card debt to a new card. All you'll be
achieving by spending on your new card is increasing debt.
While there are other means of tackling a credit card debt
problem, consolidating credit card debt appear to be an effective credit card debt management measure. Apart from the fact that this approach present as a free credit card debt consolidation that you can do yourself, it enables you to take
charge of your own situation.
Not everyone will want to opt for consolidating credit card debt
via 0% balance transfer credit cards; nor have the inclination to self-manage their credit card debt problem.
This is where one of
the reputable, free credit card debt consolidation companies can help you work out which credit card debt-busting strategy is right for your personal circumstances.
For example, your credit rating status may dictate that a credit card Debt Consolidation Loan
might be the best option for you.
The content on this site is purely for information purposes only and is not intended to replace your seeking professional financial advice.
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