Can You Reall Benefit With Credit Card Debt Consolidation?

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Author: Paul McDermott

Article source: http://www.articledeshboard.com/. Used with author's permission.

You have seen the constant ads. If you are like me, you probably get spam emails everyday about credit card debt consolidation. Or you at least see all the TV ads, and may even be subject to telemarketing calls. Well, they know you are a spender and they want your business. But if you use credit card debt consolidation right, then you can beat these marketers at their own game.

Just so we are clear about what this is, credit card debt consolidation means combining all or most of your current credit card debt into one card, usually a new account.

The biggest benefit from consolidation usually results from the lower interest that you will pay. This can save you a lot of money, especially if you have a big balance and will need to pay it off over a few years. There are some other benefits to consolidation too.

Initial APR: This is usually the grabber. Pay 0% for some intial number of months, often 6 to 9 months, but sometimes more. Again, this can get you started if you are serious about paying off your debt.

Standard APR: Lower standard APR (i.e. the long term APR) is the other important benefit from credit card debt consolidation. Though not all credit card suppliers offer a lower standard APR, some do have a good standard APR. These credit cards offer a trade-off between initial and standard APR rates.

0% on Purchases: This is another incentive you may see. Don't fall into this trap. Your goal is to get out of debt, so don't let this one get you all weak in the knees.

Easy Management: One bill, one balance. That is one nice thing about consolidating. This makes it easier to track how you are doing on your debt reduction and management of your finances.

Other Benefits: These are not as important, but you might get rebates, discounts or reward points depending on the type of card you get. Don't let this be crucial, but just an additional plus if you get it. You might even ask for something like this. Sometimes the phone rep holds things back and adds them if that will close the deal.

So what do you do when you get your debts consolidated and your new card arrives in the mail? Hopefully you have cut up your other cards that now have zero balances. Consider doing that with this one too. Or at least put it where it takes an effort to get it. And that means not in your wallet. Use the consolidation as a tool to get out of debt and you will have made a good choice. Don't use it to dig yourself deeper into credit card debt.

Author Paul McDermott reveals more about his experience with credit card debt consolidation and other personal finance lessons, some learned the hard way, at Credit Card Debt Relief.
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