Those who are in credit card debt are often told the following suggestion of consolidating their debt.
So what exactly is debt consolidation? THe simplest definition of this is to merge or combine the balances of all of your credit cards onto a single credit card, loan or some other type of financial device preferably one that has a lower interest rate.
In the event you are going to do this in some cases you can even negotiate a lower interest rate with the car or loan that you are transferring the debt to, since they already know you will be carrying a rather large balance and they can make monthly interest charges.
Whichever method anyone adopt for you to consolidate cards, APR will almost always be the main element; actually, you might point out that it does not take lone criteria to watch out for. Therefore, if you use the financial loan in order to negotiate credit card debt, the interest fee for the bank loan should be under the annual percentage rate in the cards whose debt you might be merging together. If you don’t verify this you could end up paying the more or very little of the same amount that you already are on the cards that you are consolidating. This is why it is very important to check the credit card consolidation interest before making this decision. You should also get a full credit report from either credit score complete or there is another one called credit adapter both of which will provide you a full credit picture to completely evaluate your situation.
You also need to consider the option that the interest rate that you are getting on either the new loan or credit card could be a promotional rate. Many times banks or credit card companies will offer a 6 month to 12 month interest rate, in some cases as low as 0% APR in order to entice people to transfer their balances to the card. What you have to be concerned with is that sometimes after this promo period is over the interest rate will increase, in some cases going even higher then the original cards which would completely defeat the purpose of what you are trying to accomplish. Because of this you must look at all factors of a credit card consolidation and carefully consider this before making such a decision. If you have large balances the wrong decision can cost you $1000′s of dollars in extra fees.
