Credit Card Debt Consolidation - A Guide To Your Options

It's hard to find someone that does not own credit cards these days and a vast number of these people continually struggle with excessive debt

. If you are one of these people it may be time to consider a applying for a credit card debt consolidation loan. This however, is not the only option for consolidating your card debt.

One method of consolidation, and this is a method that was used to great effect in the 1990's, is the use of low interest and zero interest card deals. To consolidate all you would do is to transfer all your balances from your high interest cards to one card that had a much lower rate of interest. Many credit companies still offer good deals with introductory offers that will either eliminate or vastly reduce your interest but you should always ensure that the card you are transferring to does not revert to an interest rate in excess of the cards you have transferred from when the introductory offer ends, or you will find yourself worse off.

You need to choose one with a low APR for balance transfers; this will be very effective for consolidation. If you opt to venture down this route you must ensure that you are able to make sufficient payments in orderto clear any outstanding balances that you wish to transfer and within the time period that has been stipulated. If you are unable to do this you could find yourself liable for standard rate interest on your transfers.

As previously mentioned, and it cannot be stressed enough, do not be duped by a low interest or 0 interest offers if the card you are transferring your balances to reverts to a high rate after the initial low interest period ends.

There was a time when people were able to use an introductory offer and then transfer to another card offering a similar offer when the first one was coming to an end; this would effectively eliminate or greatly reduce the interest on your debt.

However, it is not as easy to do this as it once was this is because credit companies have become wise to the practice of 'card jumping' and have made it much more difficult to do; so, this is why you need to check out the interest rates that would apply to your balance once your deal expires as your circumstances may dictate that you need to stay with the card issuer longer than the duration of the introductory offer and therefore your balance will begin to accrue interest.

Probably the best way of consolidating your debt is to ask a trusted family member or friend to lend you enough money to pay it off. You can make an arrangement whereby you pay them a predetermined amount at agreed intervals. This type of borrowing, although informal, can work extremely well for a lot of people but it is always best to have an agreement put in writing to avoid any unpleasant misunderstandings.

Another option is to look into one of the many nonprofit organizations dealing with debt consolidation. These companies will negotiate reduced payments to your card suppliers on your behalf. This maybe your best option; especially if you are unable to get a consolidation loan because of a poor credit score or lack of collateral.

by: Daniel Major

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