Credit Card Debt Consolidation Essay

582 words - 3 pages

With ever increasing popularity of credit cards comes with the ever increasing popularity of credit card debt. Excessive credit card debt can be discouraging and can make a person feel hopeless. However, there is still hope and help for individuals to reduce their credit card debt and improve their credit scores. Credit card debt consolidation is an important step in the right direction.

Credit card debt consolidation is the process of consolidating debt from multiple cards into smaller number of cards. It is sometimes referred to as balance transferring. The process involves transferring the balances of credit cards with higher APRs to credit cards with lower APRs. This results in lower interest payments and gives individuals the ability to pay off their debt in a quicker manner.

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Certainly, not all companies providing these offers are created equal, so it's important to research a company thoroughly before deciding to accept their debt consolidation offer.

When researching companies look for those that are offering 0% APR. Also, it is important to research when the 0% APR ends and the APR that would be applicable after that period. The 0% APR offers usually last from 6-12 months. So, if you feel like during the 6-12 month period you can pay off a large amount of debt, then it would be wise to accept the offer even if the APR proceeding is a bit higher. However, you if don't feel confident that you can accomplish this, you should look for companies that provide a low APR over the long term. Only accept offers that are beneficial to you. For example, if the long term APR is lower than your current credit card APR. Also, it's important to check for any fees that might be associated with a balance transfer. Some companies charge a processing fee, so make sure to assess the fees and determine whether it will be beneficial for you to transfer the balance. Before you make any balance transfers, try to negotiate a lower APR with the current credit card companies in which you have a high APR.

The purpose of credit card debt consolidation is to reduce your credit card debt and eventually improve your credit card score. Once this has been accomplished, it's important to implement good spending habits so that you don't find yourself in excessive credit card debt in the near future. You can use a credit monitoring program to monitor your credit history and credit reports. This will drastically reduce the amount of errors and discrepancies found on credit reports. It will also protect your from fraudulent activity that can have a negative impact on your credit score.

When use correctly, credit card debt consolidation is a powerful tool that can assist you in eliminating your credit card debt.

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