Benefits from Credit Card Debt Consolodation
‘Credit card debt consolodation’ seems to be the most talked-about term in
the world of credit cards. It’s true that credit cards have been very useful and convenient for us and we, in fact,
treat the credit cards as a necessity. However, with every good you have evil too. In the world of credit cards,
‘Credit card debt’ is that evil and ‘Credit card debt consolodation’ is often regarded as a medicine for treating
credit card debt.
Anyone who has read any newspaper articles on ‘Credit card debt’ would already know what credit card debt
consolodation is. However, just for the benefit of others, credit card debt consolodation, in simple terms, is the
process of consolidating debt which you hold on various high APR credit cards onto just one low APR credit card.
Thus, the main benefit of credit card debt consolodation is realised in terms of APR reduction (and hence reduction
in credit card debt growth rate). This is touted as the most important benefit (and sometimes the sole benefit)
from credit card debt consolodation. However, credit card debt consolodation comes with few more benefits as well.
Some of these credit card debt consolodation benefits are widely publicised by the credit card suppliers and some
not so much:
1. Initial APR: As mentioned above, lower APR is the biggest benefit from credit card debt consolodation. Since
credit card debt consolodation is used by credit card suppliers as a tool to attract consumers, they generally
offer a 0% APR for a initial period of 6-9 months of you joining their credit card debt consolodation programme
i.e. first few months after you get the new credit card.
2. Standard APR: Lower standard APR (i.e. the long term APR) is the other important benefit from credit card
debt consolodation. Though not all credit card suppliers offer a lower standard APR with credit card debt
consolodation some do design credit card debt consolodation programmes with good standard APR. These credit card
debt consolodation programmes offer a trade-off between initial and standard APR rates.
3. 0% on purchases: This is another common benefit from credit card debt consolodation. The 0% interest (or some
lower percentage) on purchases is offered as an incentive for credit card debt consolodation. This credit card debt
consolodation benefit is again applicable only for a short initial period.
4. Easy management: This credit card debt consolodation benefit is not as discussed as others. However, one
benefit of credit card debt consolodation (from multiple to single credit card) is the fact that you need to track
and manage a lesser number of credit cards.
5. Other benefits: The credit card debt consolodation exercise might bring you some more
benefits in terms of rebates, discounts and reward points (especially if you move to a co-branded card as part of
credit card debt consolodation)
Credit in Minutes Tip #1
Stay on top of your credit report. Most credit reports contain errors. Make sure you check your credit report
every year (you get one free credit report every twelve months) and if there are errors make sure to challenge them
with the reporting credit agency. Credit agencies are required to investigate each and every challenge that gets
Credit in Minutes Tip
Just because you qualify for all of those credit cards does not mean you should get them. A person with too many
credit cards looks sketchy in the eyes of a potential creditor. Think of it this way: if a person is financially
stable does he or she need ten different credit cards? Wouldn’t just one or two suffice?
Credit in Minutes Tip
The best way to raise your credit score is to make all of your payments on time. It sounds too simple to be
true, but that’s all there really is to it. Staying out of debt and/or making all of your debt payments on time
will keep your score up where it should be.