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Is Credit Card Debt Consolidation Right For You?

By Monique Thomas

If you currently have two or more credit cards, then there is a very real chance you have received an invitation to consolidate your credit card debt. Before you go ahead with this offer however, you may want to consider the following pros and cons to credit card consolidation:


1. 0% InterestWithout doubt, the biggest pulling power to any credit card debt consolidation is the attractive offer for 0% interest on your new credit card debt balance. Not only does this save you from having to pay the very high monthly rates usually charged on your account, but you can also use this as the perfect platform to reducing, and hopefully paying off, your credit card debt.

2. No feesYou may well be paying annual fees with not one but both your current credit cards. Credit card debt consolidation offers nearly always come with a no fees arrangement, so not only are you saving from the reduced interest rate, but you also have no additional fees to pay.

3. Only one creditorWith multiple credit cards comes multiple repayment dates and it can all become a bit confusing who to pay when and how much? Credit card debt consolidation means you no longer have this concern and all you need to concern yourself with now is making one repayment, once a month.


1. InterestBefore you agree to any credit card debt consolidation you need to read the terms and conditions of the offer very carefully, as in most cases the 0% interest rate offer only stands provided you do not miss any payment dates. In the event that you miss a payment date, even if it is only by 24 hours, and you lose the promotional 0% interest rate and are forever charged the credit card company's standard interest rate thereafter.

Another factor that you need to consider with regard to interest is: most credit card debt consolidation offers come with the 0% interest promotional offer attached only to either the portion of debt you consolidate to the new card, or on any new debt that you create after you have the new card, but rarely to both. Before you agree to the credit card debt consolidation, make sure that the promotional 0% interest rate applies to both the balance you transfer and the new debt you incur during the promotional period.

2. Credit ratingAlthough it may seem like a good idea to extinguish an old credit card if a better offer comes along, one downside with this is you also extinguish the records of one of your oldest credit histories. So, provided you have always made the minimum repayment and have not had any major problems with the credit card you are going to discard as part of the credit card debt consolidation, you have just voided your oldest debt record with the credit rating agencies. This can have a profound effect on your credit rating if subsequent debt you have arranged has not been as well managed as the credit card you are discarding.

3. No transfer optionHaving agreed to the credit card debt consolidation you may find you are later approached by another credit card provider offering you the same terms as the previous credit card consolidation offer, but for a prolonged period. You may now wish to transfer your credit balance and consolidate this to a new account. However, be careful as most credit card companies have caught on to this trick and will now charge you a fee if you wish to transfer your balance off their account for the purposes of consolidating it with another!

There are certainly advantages to credit card debt consolidation. Likewise there are disadvantages to it. Nonetheless, as with any agreement you enter into, you need to make sure the terms and conditions of the credit card debt consolidation are in your favour and help you to manage your credit card debt so that you may be better placed to cancel or eradicate your credit card debt.

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Monique Thomas helps you find the resources and information you need to make an informed decision on your finances. Subcribe to our announcement list by visiting:Credit Card Debt Consolidation