Credit Card Debt Consolidation Loan
All Your Plastic Debt Rolled Into One Payment
A medicine often prescribed for treating 'credit card debt' is a credit card debt consolidation loan.
You already know that to consolidate credit card debt, you take all your credit cards with high APR (annual percentage rate) and move or transfer the balances into one card with a low APR.
The main benefit is, your debt is growing at a much slower rate.
When you consolidate credit card debt there are a few other benefits as well. You may already be aware of some, but a few of these benefits may surprise you:
The Initial APR offered by the credit card providers is generally 0% for a short period of time, usually 6 - 9 months from the time you start to participate in their credit card debt consolidation programme.
A 0% interest on purchases is often offered as an incentive to consolidate credit card debt. This incentive is usually a limited time offer.
The Standard APR, that is the APR applied to the long term of the loan (after the Initial APR has expired) is often lower when you consolidate credit card debt. While not all credit card providers offer lower standard APR on credit card debt consolidation, some may offer a trade off between initial and standard APR rates.
Easy management is another benefit of credit card debt consolidation. With a single credit card you can track and manage your debt more vigorously and attentively.
There are other benefits of credit card debt consolidation including but not limited to: rebates, discounts and reward points. If you move to a co-branded card as part of consolidating your debt, read the agreement to see if the additional benefits are worth the transfer.
Before Credit Card Debt Consolidation
If you feel you would like to avoid credit card debt consolidation, here is another simple step by step process to get rid of your credit card debt problem:
Take stock of your situation. Create a little table or chart with the following columns:
Fill the table/chart with data from your various credit card statements.
Which credit card is contributing the most to the credit card debt problem? Which card has the highest APR and highest balance?
Check to see if reward points can be used to make partial payments or cover any kind of fees. Can the points can be bartered for something you need. (If you spend less, then your credit card debt won't climb).
Eliminate the debt on the credit card that is contributing the most to your debt problems.
Use controlled and healthy spending habits to avoid aggravating the credit card debt problems.
Look for other ways of adding to your income. Are there ways for you to earn extra money? (The more money you can apply to your credit card debt, means an earlier end to your credit card debt problems.)
This is just another way to tackle credit card debt problems. You may want to check out other debt and financial management planning options.
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