Consolidate Credit Card Debts

Consolidate Credit Card Debts

Consolidating credit card debt would be very helpful when it comes to paying off your interest for many credit cards that you hold. It would be a terrible job to pay off interest every time for the list of cards that one holds. Therefore this consolidation is a boon to all those who will variable have many credit cards with different features in it. This has many other benefits to lower your interest or some other features too.

Consolidate Credit Card

It simply means consolidation of debts on different cards into minimum so that you are benefited. This consolidation is generally done though low interest bank loans. This can also be done by transferring the balance in it to a new one. This is another technique to lower your debts. You can easily turn all the debts that you have in multiple credit cards into the new with minimal interest.

Annual Percentage Rate (APR)

The first and foremost thing for one to look in a consolidate credit card would be the APR. This is the key to your consolidation. It is with this annual percentage rate one has to move further in their steps to consolidate the cards. As mentioned previously one can consolidate it either through bank loans or through balance transfer. Whatever method one follows, the APR would be the base, which determines the consolidation.

Suppose if one uses the bank loans to consolidate their credit card, then it should be in such a way that the interest of the bank loan been applied should be lesser than the annual percentage rate. Suppose if you are going to use the transfer mechanism to move to a new one then one has to make sure that the rate of the new that you are about to get must be much lower than the credit card that you are about to consolidate into one.

Issues with Annual Percentage Rate

There are other issues, which one must take care with this.

Sometimes or most of the times, companies used his APR only for a short period of time and this induces people to consolidate their credit cards with this particular agency. However, this is a false alarm to people. This exist only for a particular period say 12 months or even less, but after this particular period the annual percentage rate increases steadily and this would totally drop your economy down.

Initially you may be offered even a 0% annual percentage rate for a period of 3-6 months. However, later this may have a good rise and lead to danger. If the change in the APR even after the specific period were either lower or the same to the current one, then it would be favorable. So one has to take into all these issues and then consolidate your credit cards.

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