People who are in debt (credit card debt) often get to hear this advice ‘Consolidate credit card debt’. So, what does that ‘Consolidate credit card debt’ mean? Well, pretty simply, ‘Consolidate credit card debt’ means consolidating the debt on various credit cards into one (or two) credit card. This consolidation can be done either through a low interest bank loan or by transferring balance to a new credit card (i.e. transferring the amount you owe, on one or more credit card, to a new credit card(s)).

What is there to look for in the process of consolidating credit cards?

The important thing to consider is the annual percentage rate or the APR. This is important or could also be the sole criteria to look for in the choice of method you would want to follow in consolidating your credit cards. In case you choose to consolidate your credit cards through a bank loan make sure the interest on the loan is lesser than the APR of the debt from the credit cards you wish to consolidate.

In the same way, if you are considering applying for a new credit card make sure to check that the APR of the new card is also lesser than the debt of the credit cards you are consolidating. But there is something that you should be aware as you consolidate you credit card debt.

The APR rates advertised by most credit card suppliers are the short term APR rates which are meant to lure you to consolidate credit card debt with them. Short term APR rates mean that this can only be used for an initial period of less than 12 months or some other period before the rates go up. Credit card suppliers would offer you low or even zero percent APR for the first 6 to 12 months when you consolidate your credit card debt but the APR rates are higher after that period. Make sure to check the how much is the higher APR rate.

Your decision to consolidate credit card debt will be fruitful only if the new APR rate is lower than or equal to the APR on your current credit card. You can start with inquiring from your credit card supplier if you can avail of a low APR from them. This would make your work on consolidating your credit card debt smoother.

Before you move on to consolidate credit card debt you should understand that consolidating credit card debt will be beneficial only if you pledge to adopt and follow disciplined approach to credit card usage i.e. controlled spending and regular/timely payment of credit card dues.

You can learn more at credit card debt relief

1. Make an expenditure list

Write down everything you spend. You will be surprised at some of the things you spend money on, that you do not have to. Just think if you cut out the journey to the coffee shop every morning you could save anywhere between $10-$30 a week. That probably equivelents at least one debt payment per month. Once you have the information written down you will be much more motivated to not spend in certain areas. It may even help you become a gourmet home cook or cut down on smoking.

2. Make best use of credit cards

See if any of your credit cards have interest free offers or transfer any credit card debts to a new interest free credit card. The 6-12 months in interest relief could give you the money to pay off another debt.

3. Catch up on the world for free

Watch the morning news on the tv or read it on the internet. You will save around $5-7 dollars a week in newspapers.

4. Assess all your household bills and expenses

See if there are any cheaper suppliers. I know I save a bundle when I combined my gas and electricity payments. You may also be able to cut back on certain cable channels or even combine internet / phone and TV. You may be able to find a cheaper supermarket for food or buy your gas from another station on your daily route.

5. Budget for the coming month

Look at your household income and work out a reasonable budget and if you can include a little cash to spare for those “out of the blue” moments.

6. Separate your money from debt money

Create a new bank account or, if your account allows it, a new pot. That way you can easily keep track of how much is left as the month draws on.

7. Leave temptation at home

Leave all credit cards, debit cards and check books that are unneeded at home. If you never need these cards, keep the account details on file and cut them up. I always enjoy seeing how many pieces I can cut a card into!

8. Get a long term plan

If you are in a large amount of debt then there is no point fooling yourself into thinking that it will disappear in a flash. Set yourself up for the long haul and it will be much easier to stick to and not get depressed.

9. Join Ebay and have a yard sale

“One man’s junk is another man’s treasure”. Look around your home, if you have been there a while, chances are you have a lot of stuff that you really don’t need. Collect it all together and sell all the quality items by auction on ebay. The rest can be sold in a yard sale. You may end up with a bigger lump sum than you imagined.

10. Make some more money with your free time

With some of the free hours you have every week you could make some extra money from your hobby or find a part time job. I started blogging as a hobby and ended up making money on the side. Now it is my full time job. Your knowledge should not be undervalued. You may be an expert gardener or be able to create some great art to sell. Alternatively a couple of hours working at the a pizza restaurant or local store may actually be fun and prevent you from spending.

11. Ask for a raise

Most people feel undervalued at work. It is said “if you don’t ask you will not receive”, so ask your boss and you may be surprised. Company policy is often never to offer a raise unless asked.

12. Lose the shame of debt

Debt is very common and many people are in the same situation as you. If you let your friends and family know then the attitude towards you will be a lot more open and people will be more willing to spend time with you in non-spending situations. You may even be forced to take some free drinks from close friends on the occasional Friday night. Don’t be ashamed, these are your friends and you will be there for them one day too.

13. Speak to a professional

This is something that will go hand in hand with these tips and many professionals will give you many more ideas on top of these. You may be able to consolidate some of your debts or even wipe some off or propose settlement offers.