Pointers on Consolidating Credit Card Debt

Debt consolidation

People who are dealing with bad credit debt should consider credit card debt consolidation. If you find yourself drowning in  credit card debt as a result of bad money management, poor health  or uncontrolled spending, consolidating may be the answer. Here are some pointers on consolidating credit card debt.

Why Consolidate Your Credit Card Debt?

  • Lowers your interest rate. Do you have a few cards with GREAT interest rates and then a few with VERY HIGH interest rates?  Many consumers are unaware when their credit cards increase their interest rate.  It can happen by simply missing a payment or they can send you and email or letter telling you that the interest rate is going to increase, but its buried in a 3 – 4 page mailer that is in small print and double sided!  Of course most people never get past the first page and the interest rate hike is buried some place on page 2 or 3!    It happens a lot of times and you should be monitoring your credit card statements for increases in your credit cards interest rate.  Unless you pay off your credit cards in full at the end of the month, you should be mindful of the interest rate you are paying.  Once you find these high interest ones, transfer the balances to your low interest credit card.  Many credit card companies offer special balance transfer rates.  These are SUPER low rates, but have a time period. TIP:  Put the end date in your phones calendar and set an alarm for 1 month prior, so you know that you need to find another low rate card if you haven’t been able to pay off the card in full.
  • Pay only once each month. Ideally, you should consolidate all your debt onto one low interest card and pay just 1 monthly payment.   This arrangement enables you to focus on your debt repayment and eliminates confusion or delays in your payments.
  • Modify your spending habits..  Most credit cards will separate your charges and show you how much you are spending on entertainment, eating out, car repairs etc.  Analyze your spending habits.  See where you can cut down on your spending.
  • Work out a plan. You need to create a definite repayment plan if you really want to recover from bad debt. This means finding ways to cut-off your monthly expenses and putting your spending in control. For some, paying off debts would mean getting a second job to help with the bills. Whatever your plan is be determined to stick with it until you’ve finished paying off all charge you’ve transferred to your balance transfer credit card.
  • Monitor your credit report.  Purchase a credit monitoring service.  Make sure that everything on your credit report is correct.  Also be aware that ID theft is on the rise.  Whether you have good credit or bad credit.  There maybe someone in need of a valid social security number pretending to be you!  Credit monitoring not only helps you keep track of your credit score, but stops ID thieves dead in their tracks!

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008

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