Can You Reall Benefit With Credit Card Debt Consolidation?

By Paul McDermott_

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.

The main benefit of credit card debt consolidation is realised 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. Some of these credit card debt consolidation benefits are widely publicised by the credit card suppliers and some not so much:

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 have a lot of debt, then you will probably still have a balance after the initial low rate. Be careful not to take a deal that has a 0% initial rate but then a standard rate that is too high.

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: Having one bill and one balance will help you keep track of your debt payoff progress.

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 once you get your old balances paid off, hopefully you have cut up those cards, because once these balances are zero, that is when the real test begins. Are you going to dig yourself a mucher deeper debt hole by using these cards again or are you finally committed to ridding yourself of credit card debt for good. If you are going to get rid of it, then a credit card debt consolidation can be a big help in achieving your goal.

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

Article kindly provided by UberArticles.com

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