The Easy Way Of Consolidation Credit Card Debt. If you aren’t careful you can let your debts get out of control and before you know it you are in real financial trouble. One of the worst debts for getting out of control is credit card debt. There are millions of people worldwide that are looking for a way of consolidating credit card debt so that they can get back in control of their finances. The problem is that some people just jump into the first offer they see about consolidating their debt and some consolidation offers can actually make you even worse off than you already are.
It is important to do your research regarding consolidating credit card debt before you sign up to anything.
One of the most common types of consolidation loans that people use to consolidate their credit card debt is to transfer the balances of all their cards to one new card that has a lower interest rate. For example, if you have 3 credit cards each with a balance of a few thousand dollars and they carry interest rates of 17%, 19% and 20%. If you could move the balances of all three credit cards to one card that had a lower interest rate such as 13.5% then you would save money and have a lower monthly payment. Sounds like a great plan doesn’t it?
But don’t look at that lower interest rate and think you are getting a great deal, just take your time and look into all aspects of this new credit card you are considering. It is possible that there may be a catch; you know the saying ‘if it seems too good to be true it usually is’ keep that in mind and do your research.
It is quite possible that this 13.5% interest rate is a honeymoon rate. That means that the credit card company offers a low rate to entice people to open a credit card account but that rate is only for a certain period after which time it will increase. It is possible that when that interest rate increases you could be on a higher rate than you originally were with your other cards. Before opening a new credit card account you need to know if it has a honeymoon interest rate, when that interest rate is likely to increase and what rate it will increase to.
The next thing you need to consider is what you are going to do with your empty cards once you have transferred the balance to a new card. When you are consolidating credit card debt by transferring your credit card balances to one new card you will be left with those three cards with zero balance. What is stopping you from going out and maxing those cards out again? Before you know it you are in more debt than you were to begin with.
This is sometimes referred to as ’empty card syndrome’ and some people just can’t help themselves and think they can go and spend money because they have these empty credit cards. It is probably a good choice to cut those credit cards up so you will not be tempted to use them or put them away somewhere so you only use them in case of emergency.
If you can get a good deal when consolidating credit card debt with a good interest rate for a long term and you can throw away your old empty cards, then consolidating your debt will put you in a better position financially. Manage your debt wisely and you will have a good financial future to look forward to.
© 2023 Credit Robin, Inc. All Rights Reserved. Product name, logo, brands, and other trademarks featured or referred to within Credit Robin, Inc. are the property of their respective trademark holders. This site may be compensated through third party advertisers.
Credit Robin, Inc. is committed to ensuring digital accessibility for people with disabilities. We are continually improving the user experience for everyone, and applying the relevant accessibility guidelines.
Credit Robin, Inc. is a credit repair agency with credit repair training and counselors. Financial and legal advisors can be made available to assist consumers with credit issues. All users and customers must be in compliance with our Terms of Services and contracts made available online or in person.
All logo and brands referencing iPhone, Android, Equifax, Experian, TransUnion and other organizational names are registered trademarks owned by each respective organization used under fair-use law.