ALESSANDRO

“Credit Card Debt Consolidation” - Anyone who has read any newspaper articles on ‘Credit card debt’ would already know what credit card debt consolidation is. However, just for the benefit of others, credit card debt consolidation, in simple terms, is the process of consolidating debt which you hold on various high APR credit cards onto just one low APR credit card. Thus, the main benefit of credit card debt consolidation is realized in terms of APR reduction (and hence reduction in credit card debt growth rate). This is touted as the most important benefit (and sometimes the sole benefit) from credit card debt consolidation.

However, credit card debt consolidation comes with few more benefits as well. This credit card debt consolidation benefit is not as discussed as others. However, one benefit of credit card debt consolidation (from multiple to single credit card) is the fact that you need to track and manage a lesser number of credit cards.

The credit card debt consolidation exercise might bring you some more benefits in terms of rebates, discounts and reward points (especially if you move to a co-branded card as part of credit card debt consolidation)

Save Money With Balance Transfer Cards - In the past when balance transfer offers were more plentiful and lucrative, some consumers used balance transfers as a way to avoid paying interest all together. If that is your strategy you better think twice before moving balances since opening new accounts will eventually catch up with you as card issuers view your credit history. This can cause a drop in your credit score as well as increased difficulty in securing other types of loans or balance transfer cards.

Consolidate Other Debt- Consumers often begin to feel overwhelmed by the number of accounts they have to keep track of each month. If you have done your homework and the cost of transferring many accounts onto one new card are not exorbitant, having just one monthly payment can make managing your accounts easier. You can also move debt outside of credit cards if you offer includes convenience checks which can be used to pay off other debts. Consider how long you will need to pay off the new debt, keeping in mind the fact that after the introductory period is over you will likely have a higher interest rate on a now higher balance. Read the rest of this entry »