Should I Consolidate Credit Card Debt?

Consolidate Credit Card Debt! People in debt (credit card debt) often hear the advice of' credit card debt consolidation.' So, what does' credit card debt consolidation' mean? Well, quite simply,' consolidating credit card debt ' means that debt on different credit cards is consolidated into one (or two) credit cards.

Consolidate Credit Card Debt

People in debt (credit card debt) often hear the advice of' credit card debt consolidation.' So, what does' credit card debt consolidation' mean? Well, quite simply,' consolidating credit card debt ' means that debt on different credit cards is consolidated into one (or two) credit cards. A lower interest bank loan or balance can be transferred to the credit card (i.e. the amount you owed to a new credit card(s) by one or more credit cards).

So what should you do when consolidating credit cards? Well, APR or the annual percentage rate is the key to finding. Regardless of how you consolidate credit cards, APR is always the key; in fact, you can say that these are the only criteria. Therefore, if your credit card debt is consolidated by a bank loan, the bank loan rate should be lower than the APR of your credit card debt. Likewise, you must ensure that the APR in a new credit card is lower than the credit card that your debt is consolidated if you move to another credit card.

However, if you plan to consolidate your credit card debt, you have to be aware of a catch. The APR rates most credit card providers advertise are short-term APR rates, which encourage you to consolidate your credit card debt. Short-term APR rates apply for an initial period of less than 12 months, or for a period after which APR rates will increase. If you continue to consolidate your debt with these credit card providers for the first 6-12 months, they will give you an even lower (even 0 percent) APR and, later, a much higher APR. The higher APR rate should be monitored.

Your credit card consolidation decision will only prove successful if the new APR rate on your existing credit card is lower or equal to the APR rate. If it works, it will make things really easy for you, check with the current credit card provider to see if you can reduce your APR.

Before consolidating credit card debt, it is only useful if you pledge to follow a disciplined approach, i.e. controlled expenditure and regular / temporary payment of credit card fees, to consolidate your credit card debt.