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Should You Consolidate Your Credit Card Debt?
By Paul McDermott
You probably get flooded by ads everyday for credit card 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 consolidation if you choose wisely.

Just so we are clear about what this is, credit card consolidation means combining all or most of your current credit card into one card, usually a new account.

The biggest benefit from consolidation usually results from the lower interest that you will pay. This can save you a lot of money, especially if you have a big balance and will need to pay it off over a few years. There are some other benefits to consolidation too.

Initial APR: This is usually what attracts most people. The offer is that you pay something like 0% for say 9 months, after which you start paying the standard APR. Try to get more months from the sales rep and this could really springboard your payoff program.

Standard APR: Lower standard APR (i.e. the long term APR) is the other important benefit from credit card consolidation. Though not all credit card suppliers offer a lower standard APR, some do have a good standard APR. These credit cards offer a trade-off between initial and standard APR rates.

0% on purchases: This is another common benefit from credit card consolidation. The 0% interest (or some lower percentage) on purchases is offered as an incentive for credit card consolidation. This credit card consolidation benefit is again applicable only for a short initial period.

Easy management: What I like most about consolidating credit card is that it makes it easier to see your balance decreasing. (You are paying your off, right?) With one card and one balance, you can track your progress more easily.

Other benefits: Credit card consolidation 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 consolidation.

So you get your card in the mail. The big question is how are you going to manage this new line of credit. Did the accumulation of wake you up so

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that now you will quit spending beyond your means and get your under control? Or will you just drown faster by spending more now that your other cards are at zero balance? You know the right choice.

Paul McDermott shares his experience with credit card consolidation and other personal finance lessons, some learned the hard way, at Credit Card Relief.
Don't reprint this article. Instead, reprint a free unique content version of this same article.

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