Tips For Credit Card Consolidation
Credit card consolidation may save you a considerable amount of money, especially if you’re transferring the balances from high APR (annual percentage rate) credit cards to low APR credit cards, or better yet, one of the many charge cards that offer zero percentage APR for balance transfers.
There are five distinct reasons why charge card consolidation may very well be an excellent choice for you.
The first, as we just mentioned, is because your current charge card or cards are costing you far too much in annual fee or APR. It may be that the card you use for credit card consolidation may not offer a permanently low APR but rather a short term zero or low APR percentage for any transfer. Go for it! You can always do charge card consolidation, or just one bulk transfer to yet another card when the low introductory rate runs out on this newest one you’ve chosen.
Annual fees can be a strong incentive for credit card consolidation as well. These can add up, especially if you have several credit cards. While many cards have annual fees around $20 or $25 dollars, some can carry an annual fee as high as $250. Keep in mind, however, that doing charge card consolidation by transferring to a credit card that has no annual fee is only advantageous if you’re going to use that credit card for the year. If, however, you’re looking at a card whose introductory rate is six months, after which the APR skyrockets, that low or nonexistent annual rate is not going to be much help to you.
Your other charge card consolidation option may well be a personal signature or collateral loan. While it might seem that using a loan as a resource for credit card consolidation is a little like robbing Peter to pay Paul, the fact is that your monthly loan payment will be much easier to accomplish than the use of one credit card. Why? Because you won’t have the temptation to use that credit card and rack up even heftier charge card debt.
If your credit card payments have been continually late they’ve probably affected your credit. Credit card consolidation may be a good way to reduce the debt and improve your credit standing.
One last reason for doing a charge card consolidation is to make a little money from it – right up front. There is so much competition among the various credit card companies that some literally offer to give you money back immediately if you’ll transfer your charge card balances to them. They do this by saying that they’re going to reduce that debt.
If, for example, you had a total of $2000 in charge card debt on your current charge cards, you might do a charge card consolidation with a new charge card that offers to forgive five percent of your debt. What this means is that the minute you do the credit card consolidation, transferring your outstanding balances on your current credit cards, you’ve made five percent of $2000, or $100 instantaneously.
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