You probably get flooded by ads everyday for credit card debt consolidation deals. Whether on TV, mail or email, they are out there and they want you. Let's face it, if you are a spender and use credit cards, then you are in their target market. But before you run for the hills from these ads because of their slick look, there are some benefits that you can gain from credit card debt consolidation if you choose wisely.
In case you are unsure, what I mean by credit card debt consolidation is combining your current card balances into one account, which is usually a brand new card, although you could consolidate onto a card you already have.
Again, you must use your card correctly, but if you do, and you get a good rate, then this can be beneficial for you in your effort to get rid of your credit card debt for good. Here are some things to look for in getting the best deal.
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: If you are going to take more than the initial 6 to 9 months to pay off your credit card debt, then you need to look carefully at this rate. Clearly the credit card company hopes you will take a long time to pay. That is where they make their money, in addition to you spending more with your card, which I hope you don't do.
0% on Purchases: Try not to get excited about this. Your goal is to get your debt paid off remember? So you should not be looking to go on a shopping spree. But if you did have an emergency purchase that you absolutely needed, this might be a way to get it.
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: Sometimes you may get things like rewards, discounts or rebates. Make sure that you don't have to buy anything more to get these. And note that sales reps often have some leeway if offering these, so either ask, or if you act unsure about whether you want to consolidate, the rep may start throwing in benefits like this.
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 shares his experience with credit card debt consolidation and other credit and debt issues at Credit Card Debt. Learn about his mistakes so you can avoid them. You can get a unique content version of this article.
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