Credit Card Debt Consolidation
Credit card debt consolidation is one way out of a big problem
that has engulfed a lot of credit card holders. In most of the cases the individuals themselves are to blame for
landing themselves in such a situation...
These are people who couldn’t really grasp the concept of credit cards and mistook it for free money. A small
number of people also get into debt due to financial crisis.
So what do you do once you get into this difficult situation called credit card debt? This is where credit card
debt consolidation comes in.
What is credit card debt consolidation
Credit card debt consolidation is often considered as the first step to solving the issue of credit card debt.
Credit card debt consolidation as the name suggests, is the
process of consolidating the debts on your various credit cards at one place i.e. you move the debt from various
credit cards to one credit card.
The debt consolidation process is also called balance transfer process i.e. transfer of outstanding balance from
one or more credit cards to another credit card. How does credit card debt consolidation help? is the question
which comes up immediately.
Reasons for credit card debt consolidation
One of the main reasons for credit card debt consolidation is the difference in the
APR of different credit cards. It’s very logical indeed. The debt which you hold on your credit card(s) is
going to increase by APR percentage every month, as per the calculated per month rate.
This means the higher is the APR the faster your debt grows and the more you have to pay. So it makes
perfect sense to go hunting for a credit card with a lower APR.
However, you should be careful while hunting for a lower APR credit card. Some of the credit card suppliers tend
to decorate balance transfer offers with very low APRs.
More often than not, these lower APRs are applicable only for a short period of time e.g. first 6 months,
after which a higher APR is applicable. So unless you are sure of repaying the debt in this short term and unless
the higher (long term) APR is less than or equal to the current APR(s), these offers would not be beneficial to
Another thing to check is the balance transfer fee. Though a number of companies charge no fee for balance
transfers, there are some that do charge a fee. Balance transfer fee would become another parameter in determining
whether the balance transfer will benefit you or not.
Also check if your current credit card supplier can help you in some way. Sometimes your current supplier might
also agree on lowering the APR for a short period of time so as to enable you to make the payments and also to
retain their customer (you).
You might contact a debt assistance company if you don’t feel entirely comfortable in dealing with the issue all
by yourself. Since assisting people with their debts is the core business of these companies, they have all the
information about various offers already available with them.
So not only do you get professional advice but also save on a significant amount of time and hassle
involved with debt consolidation. Do ascertain the credentials of such a company before approaching them for advice
as there are a plenty of fake companies too in the marketplace.
Whatever way you take it forward, credit card debt consolidation is one option which you
should surely consider.