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

This article hoped to give you a few pointers and advice to help you make the best of your situation.

If you were like me then you may not have maxed out all of your credit cards. And as long as you have realized that debt is a problem you have hopefully stopped spending on them and are concentrating on keeping up with the monthly payments.

You need to try and reduce the amount of credit cards you have to make the payments easier to track and more manageable and obviously it is a good idea to find the cards with the cheapest offers.

So first thing to do is call each credit card company. Find out if they have any special interest offers in action or any coming up. Some may offer 0% for a period when you transfer over from another card. Others may be offering a low interest for the life of a transferred balance.

The important thing is to get all the information written down. A spreadsheet style such as that available for free in Google Documents or Microsoft Excel is an excellent way to analyse the data. It is also a good call to write the balance and credit limit for each of these cards down next to the offers so that you can work out where to transfer your money for the best long term deal.

Once you have this data you can start working out where your money should go. Most companies offer a balance transfer fee so always take this into account when looking at the figures.

Here is an example of what you may end up with.

This example is pretty simplistic but you can see how easy it could be to take advantage of available offers to simplify your payments and actually save money on interest in the long run.

What if you have maxed out all of your cards?

I’m not suggesting you go and get more cards but it may be worth your while in the short term, opening some new cards and transferring balances from your maxed cards. If you have kept up with payments up until now you are more likely to be accepted for a new card.

Look for new cards that have the same or better terms than your current cards. Pay particular attention to balance transfer fees, yearly fees and any offers they have. Don’t jump for any interest fee card. If you are in debt it is likely that you will be for a very long time, so it is worthwhile picking a long term offer at a low rate rather than a 0% offer that does not last long and then jumps to a high interest. You may not be in a position to switch the balance again when the term is up.

Alway make sure that you close the old accounts, this normally needs to be done in writing.

Playing with your cards and dealing with the stress

If you are in debt it is likely that you are prone to stress and outbursts at times, most of us have been there. I always advise to stay positive and be careful not to rush any decisions. Sit down by yourself with a cup of tea or coffee and work this out. Don’t let distractions get in your way and make sure you look over the figures until you are satisfied that you have the best solution. Then write down each step that you have to take. Follow this list and mark off each call and trasnfer until you are completed.

Once this is done, you will feel like a weight has been lifted and you will be one step closer to achieving a debt free you. Even if you still need to contact professional help, at least you will be in a more organized situation.