Do you feel like your credit control has just flown out of the window? It can easily happen to anyone and non of us are immune to the effects of credit card debt today. Credit card companies are having a field day.
Are you among the millions of consumers looking for ways to consolidate credit card debt and manage your finances better?
While it is important to get a good handle on your credit card accounts and ensure that you haven't extended yourself beyond your means, consolidating credit card debt itself can sometimes create even more financial hardship if you don't take great care in how you approach this significant financial issue.
A very common and indeed tempting way to consolidate credit card debt is to transfer the balance from one credit card company to another that is offering a zero or very low percent balance transfer offer for a limited period. Beware! What do I mean?
Well, let's say you have more than one credit card or store cards that you need to consolidate your debt on. It is quite common for most of us to have several cards with varying ammounts owing on them. They might all have different interest rates applying to them which can be anything between sixteen and thirty plus percent.
If you are able to transfer the bulk of the balance to one or more cards with zero or low interest rates you can save a small fortune immediately. Now that has to be great news - yes?
When you are about to consolidate credit card debts there are some things you need to consider.
Are you aware that each time you apply for a credit card they do a credit check on you and it leaves a record on your credit file? So if you know you are probably not going to get an offer to transfer money, do not apply as it will only show you in a poorer light on your credit score.
The "special offer rate" is just that and will increase at some point in the future so make sure you know up front when the rate will go up and most importantly by how much. You might find it is worse than what you are paying now.
Do not put that nice new card into your wallet where it will be a temptation. It will be saying to you "look, there is nothing on your statement and you have all that credit available to spend"
Many people fall into this trap. It is not so much how much credit you have to spend as how much more debt you can easily fall into. Don't do it! You will get deeper into debt and the credit card company will watch you do it with glee. They do not care about you they only care about one thing - PROFIT. If you can, put that card away somewhere safe and resist the temptation to carry it around with you.
The Trap Is Set
OK so now you have consolidated some of your credit card debts and have a nice new rate of interest to go with it, and life feels a bit easier right now. Read the small print carefully because what often happens is frightening. You have a bit of a surplus on your new card over and above the total you consolidated and you think to yourself I deserve a treat. So you go out and spend a little bit more on that new card because you can. The trap has sprung!!!!
You may well find that when you make your monthly payment on that consolidated debt you are only paying off the consolidated part of the debt and the new spending is not actually reduced at all until the original transfer is cleared. Do not be tempted to treat yourself as it WILL cost you more in the longrun.
What's The Secret?
If you can move your balance to a new card do not use this new card for any new spending because if you read the small-print you may well find a nasty surprise waiting for you! Simply use the special offer to your advantage and ideally only if you can clear the debt off within the offer period before the rate suddenly shoots up.
It's quite simple to consolidate credit card debt by doing balance transfers to a company with a lower rate of interest, but be careful how you manage the new card. Credit cards are one of the biggest causes of debt and misery we can all find ourselves in today.
I hope you find this article useful and you can start to use credit card debt consolidation offers to help you, not the credit card companies.
Are you among the millions of consumers looking for ways to consolidate credit card debt and manage your finances better?
While it is important to get a good handle on your credit card accounts and ensure that you haven't extended yourself beyond your means, consolidating credit card debt itself can sometimes create even more financial hardship if you don't take great care in how you approach this significant financial issue.
A very common and indeed tempting way to consolidate credit card debt is to transfer the balance from one credit card company to another that is offering a zero or very low percent balance transfer offer for a limited period. Beware! What do I mean?
Well, let's say you have more than one credit card or store cards that you need to consolidate your debt on. It is quite common for most of us to have several cards with varying ammounts owing on them. They might all have different interest rates applying to them which can be anything between sixteen and thirty plus percent.
If you are able to transfer the bulk of the balance to one or more cards with zero or low interest rates you can save a small fortune immediately. Now that has to be great news - yes?
When you are about to consolidate credit card debts there are some things you need to consider.
Are you aware that each time you apply for a credit card they do a credit check on you and it leaves a record on your credit file? So if you know you are probably not going to get an offer to transfer money, do not apply as it will only show you in a poorer light on your credit score.
The "special offer rate" is just that and will increase at some point in the future so make sure you know up front when the rate will go up and most importantly by how much. You might find it is worse than what you are paying now.
Do not put that nice new card into your wallet where it will be a temptation. It will be saying to you "look, there is nothing on your statement and you have all that credit available to spend"
Many people fall into this trap. It is not so much how much credit you have to spend as how much more debt you can easily fall into. Don't do it! You will get deeper into debt and the credit card company will watch you do it with glee. They do not care about you they only care about one thing - PROFIT. If you can, put that card away somewhere safe and resist the temptation to carry it around with you.
The Trap Is Set
OK so now you have consolidated some of your credit card debts and have a nice new rate of interest to go with it, and life feels a bit easier right now. Read the small print carefully because what often happens is frightening. You have a bit of a surplus on your new card over and above the total you consolidated and you think to yourself I deserve a treat. So you go out and spend a little bit more on that new card because you can. The trap has sprung!!!!
You may well find that when you make your monthly payment on that consolidated debt you are only paying off the consolidated part of the debt and the new spending is not actually reduced at all until the original transfer is cleared. Do not be tempted to treat yourself as it WILL cost you more in the longrun.
What's The Secret?
If you can move your balance to a new card do not use this new card for any new spending because if you read the small-print you may well find a nasty surprise waiting for you! Simply use the special offer to your advantage and ideally only if you can clear the debt off within the offer period before the rate suddenly shoots up.
It's quite simple to consolidate credit card debt by doing balance transfers to a company with a lower rate of interest, but be careful how you manage the new card. Credit cards are one of the biggest causes of debt and misery we can all find ourselves in today.
I hope you find this article useful and you can start to use credit card debt consolidation offers to help you, not the credit card companies.
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