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Posts Tagged ‘credit card consolidation’

‘Credit card debt consolidation’ seems to be the most talked-about term in the world of credit cards. Many people have actually gotten so used to the convenience of credit cards that they’ve actually made them a necessity. There are however always bad sides to the good. Where credit cards are concerned, the specific debt is considered the evil and often credit card debt consolidation is considered the medicine against that evil.

For the most part, anybody who has read any news on the topic of credit card debt party knows what a credit card debt consolidation consists of. However, just for the benefit of others, credit card debt consolidation, in simple terms, is the process of consolidating debt which you hold on various high APR credit cards onto just one low APR credit card.

Thus, the main benefit of credit card debt consolidation is realized in terms of APR reduction (and hence reduction in credit card debt growth rate). This is often said to be the most important benefit as well as the only true benefit from putting your credit card debt on a lower interest card. There are a lot a few different benefits that you can consider as well. Some of these credit card debt consolidation benefits are widely publicized by the credit card suppliers and some not so much:

1.    Initial APR: As mentioned above, lower APR is the biggest benefit from credit card debt consolidation. Since credit card debt consolidation is used by credit card suppliers as a tool to attract consumers, they generally offer a 0% APR for an initial period of 6-9 months of you joining their credit card debt consolidation programmed i.e. first few months after you get the new credit card.
2.    Standard APR: Lower standard APR (i.e. the long term APR) is the other important benefit from credit card debt consolidation. Not everyone of your suppliers of credit cards is going to offer a lower standard APR with a consolidation, but many do supply people who do credit card debt consolidation programs with a nice standard APR. These programs for debt consolidation normally offer you a trade-off between the standard APR rates and the initial rates.
3.    0% on purchases: This is another common benefit from credit card debt consolidation. As an added incentive, these companies throw in the 0% interest rate on purchases. These aren’t never a full-time benefit though, only for a limited time.
4.    Easy management: This credit card debt consolidation benefit is not as discussed as others. This benefit is just the simple fact that you only have one card to handle instead of multiple cards.
5.    Other benefits: The credit card debt consolidation exercise 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 debt consolidation).

You can also learn about a non profit debt consolidation by visiting mydebtconsolidationsite.us

It is the easiest thing in the world to get yourself into debt but, unfortunately, getting out of debt is generally a very long and hard road to travel. For many individuals nowadays credit cards are the basis of their debt problem and clearing credit card debt takes a bit of thought and a great deal of self-control.

The first thing you have to do is start by cutting down on your expenditure on your credit cards, and preferably to stop using your credit cards altogether. It is far too easy to use credit cards and the first secret is to leave your credit cards at home when you go out and to just take sufficient cash with you to cover your needs.

Of course you are still going to see items that you would like to buy and which you would have bought had you had your credit card with you, but the mere fact that you have to return home and get your credit card to buy something will make you think twice about it. With any luck, it will also get you into the habit of thinking about whether you really need some things. One big problem with credit cards is that they allow you to make impulse buys and nine times out of ten these purchases are things that you could well do without.

But, reigning in your spending is merely one half of the equation because you still have to do something to clear your existing debt. Of course lowering your expenditure will assist because you will have more money in your pocket and will be in a position to begin paying off more of your debt every month. Of course this may still leave you looking at a considerable time period before your card debt is clear, but it is an excellent start.

Yet another valuable way to reduce your credit card debt might be credit card debt consolidation which involves taking your current credit card debts and putting them all onto a single card with a lower interest charge. Of course this does not eradicate any of your debt although it does slow down the rate of growth of the debt each month as interest is added to your account and so gives you a better chance to catch up with the problem. Nowadays there is massive competition between credit card companies and you will find all sorts of inducements on offer to consolidate current credit card debt, including such things as 0% APR being applied to a new card for its first three or six months. Howver, as with and financial offer you do have to read the fine print very carefully and make sure that you know precisely what type of contract you are entering into. If you fail to study the small print with sufficient you may find that you are jumping out of the frying pan into the fire.

One alternative to credit card debt consolidation is to simply speak to your credit card company and ask them if they will lower the interest rate on your present card. You may be surprised to find that with so so much competition in the market many companies will look favorably in such a request in order to keep your business.

If you find that in spite of your best efforts you simply feel that you are not going to be able to reduce your debt to manageable levels then you may wish to negotiate a settlement of your debt with your credit card company. However, negotiating settlement with a credit card company requires skill and this is not a path that you ought to follow without seeking professional advice.

There is unfortunately no simple answer to reducing credit card debts and, no matter how you try to dress it up, it really comes down to a mixture of disciplining yourself into cutting back on your expenditure and paying down as much of your debt as you can afford each month. It is also a wise idea to get professional assistance to pay personal debt before things get out of control.

Here are some tips on finding simple credit debt consolidation:

- Most consolidation providers are also obliged to offer counselling to their clients. So, if the lender dealing with you does not refer to allotting a credit counsellor, you ought to prompt them. A credit counsellor can make an fundamental contribution to cleaning up your fiscal muddle.

– If you have a lot of credit-card debt, then it’s affecting your credit evaluation in a negative way. One thing that credit-card providers do not tell you is that if you carry a balance on your cards and it’s over 25 per-cent of your credit limit, then you are penalised on your credit rating, even if you make your repayments on time. So if you consolidate debts that include credit-cards with high balances, then you are doing yourself a favor and helping your credit. You can consolidate not only charge cards, but if you have a car or a personal loan, then when you consolidate those and pay them off you will improve your credit rating. Brokers love to see that you paid back a car or a personal loan. It helps to boost your credit score quite a bit.

– Get a copy of your credit report. Request a fresh transcript every year to ascertain that there are no mistakes even if you believe you have a top notch rating. If you find a mistake, get hold of the credit bureaux straight off by letter to request that item be removed. You should also contact the creditor that supplied the wrong info to the credit bureau as well, and make them change it. Beware of disputing _true_ items in your credit report. Also beware of challenging a mistake or debt that is nearly seven years old (or whatever time it takes for items to be cleared, locally, from your credit record). Your debt may have been sold off to a debt-chasing firm, and your chivvying them will make your case ‘live’ again, and may provoke them into coming after you. Let sleeping dogs lie!

– There are also firms out there who will give you an unsecured credit card debt consolidation in spite of your credit and work history, if you need a clean slate. Instead of a long line of creditors telephoning and sending letters and nonstop reminders that you owe cash, you have one obligation, one periodical payment.

– Brokers are able to stay in business by covering their risk with higher interest rates than they offer on secured debt. But this can still translate into lower periodic repayments for you, particularly if your charge cards carry high interest rates to begin with and you’ve fallen into the trap of paying late and accruing late-payment fees. Those evaporate when you pay that debt with the cash from your competitive loan and you may be able to negotiate an improved interest rate.

– By definition to consolidate means to unite or to blend into one system. However, this is not what actually happens when debts are consolidated. The existent debts are actually repaid by the credit card consolidation. Although the total amount of debt remains constant the individual debts are repaid by the new consolidation. Prior to the consolidation the client may have been repaying a periodical debt to one or more credit-card lenders, an auto lender, a student loan lender or any number of other companies but now the customer is repaying one debt to the company who provided the consolidation. This new consolidation will be subject to the applicable terms including interest rates and repayment period. Any terms associated with the previous individual debts are no longer valid as each of these has been repaid in full.

– When comparison browsing for the most favorable rates, customers ought to make it well known that they are browsing around for rate quotations and are not making a decision straight off. Firms who know they have some competition may be more likely to offer a lower interest rate than they would if they did not think the borrower was considering other options. Just like a plumber could offer his most competitive rate if he knows the borrower is seeking estimates from a number of different plumbers, firms are apt to do the same. Some providers may think the customer is bluffing and may not offer the best rate initially. However, if the customer rejects the offer and states they have a better offer with another broker, the first firm may be enticed to offer an even lower interest rate just to see if they can sway the customer.

– While outgoings are certainly significant, it is not the only factor to consider. Some customers may re-finance with a lender who offers slightly higher rates if the applicant feels as though this firm is more responsive to his needs.

I hope these few simple pointers will be of some use to you in researching easy credit card consolidation.

About the author: Niccolo Svengali is an author for credit card consolidation and credit card debt settlement websites in London.