Credit Card Debt Consolidation

More practical and safer, credit cards have a guaranteed space in people's lives. Faced with so much comfort and easiness to obtain them, are increasingly common the cases of individuals who accumulate multiple cards. Without knowing how manage them properly, they end up losing control of their spending, and often, accumulating debts. When this happens, comes the question: is it worth to consolidate the debts of the various cards?

There is no single answer. The consolidation can be beneficial in some cases, however, other may end up worsening the situation further.

What is your objective?

Before you consolidate your debt, serenely analyze your goals. Is your intention to reduce the interest? Reduce the value of the monthly payment? Increase the term of payment? If your intention is only to reduce the value of the debt, through the lengthening of credit, you better think twice. In both cases, you will end up spending more on interests, so that, instead of resolving the problem will increase it!You should see the transfer, or consolidation of balance as a second chance not to be wasted. During the grace period the new manager is willing to offer attractive interest rates to help resolve your financial difficulties. That is, it should only be considered if allowed a reduction of total expenses with interest and, consequently, allow the discharge of debt.

There is room for further errors. If you keep the old habits, and continue spending more than you can pay on the card and therefore increasing every month the balance due, most likely the institution may choose to adopt an even higher rate after the grace period. Remember that your credit history as a whole is being examined. Even if you do not delay payment of the new card, just does not pay to date another account, the terms of your card may be revised. Hence the importance of informing you in advance, about situations that may lead to a revision of fees charged on your new card.

Which card to choose?

If you have decided to consolidate their debts into one card, carefully assess all the cards you have. Find the terms and evaluate the conditions offered by various issuers. Your preference must be the card that offers the lowest interest rate. However, check before the conditions in which this rate is offered. Read the contract carefully and clarify all your doubts. Some banks offer lower interest rates only for a certain period of time, or on the balance due. In this case, it may be a better opting a card that offers a rate slightly higher, but for a longer period of time and over the entire debt value. Do the math and choose which one results in a lower interest expense. Do not charge anything else in that card until it you fully paid the debt.

Things you should be aware when transferring a credit debt

The fact that you are transferring the outstanding balance of a card to another does not mean that we should leave, in full, the payment of old bills. While the balance is transferred, and it may take several weeks, you're still subject to charges from the old card(s).

It is therefore recommended that you make an extra effort, at least to pay the minimum amount required. Keep these payments updated, then you don't need to spend more paying a late penalty and passed interests. Also, if you do not keep paying, the institution may find that your situation worsened, which can lead to a revision of the terms initially offered.

Even if you have been notified of the transfer by the bank issuing the card in which the debt will be consolidated, make sure it actually happened. Contact the call center of the issuer of the cards and request a balance transfer where you will confirm the transfer. Write the names of those who speak you you at the call center. Ask a final statement, confirming the transfer. After that, cancel the old card! This will avoid temptations. Do not leave it in the bottom of your drawer, because you might end up using it again. Moreover, if you keep it, probably means that you should pay an annuity, and you do not have money to waste.

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