Five Steps To Credit Card Debt Consolidation

When multiple credit card debts become out of hand it is probably time to turn to debt consolidation.

Many people find that having more than one credit card is a convenient way to keep expenses organised, but it can also make it harder to manage all the cards.

Consolidating credit card debts onto one card is a common and easy option that will help ease the stress when repayments have become an issue or balances are getting out of hand.

Here we look at five different steps that can be used to combine credit debt onto one card and work towards paying off that big balance.

Discuss Hardship With Current Providers

For cardholders who still want to keep more than one card in use, talking to current providers could help you decide which ones to keep and which ones to ditch.

Providers may be able to offer you some financial advice or negotiate an interest rate with you to help you pay off the balance, especially if they know you are thinking of cancelling the card.

Look At Balance Transfer Offers

There are always a number of different balance transfer offers to consider, but for bigger debts it is good to focus on cards that have a long introductory period.

Cards like the ANZ Low Rate or Citibank Gold, which feature 2.9% p.a. for 12 months and 1.9% p.a. for 15 months respectively, will make it much easier to get the debt down than one that offers a lower rate for less than 12 months.

Compare Credit Cards

Debt can be a huge burden to carry around but rushing through the consolidation process is just as bad, with many people focusing more on the balance transfer rate than actual card features.

Once a good introductory rate has been found, make sure you look at other features of the card like annual fees and rewards.

It is also a good idea to try and find a card that will revert to a low rate after the balance transfer offer ends so that you will still be able to manage any remaining debt.

Check Card Terms And Conditions

Terms and conditions vary from card to card so it is important to look closely at the fine print before deciding to make the switch.

It is particularly important to look at rate that will be applied after the balance transfer offer ends because it may be an ongoing purchase rate or a much higher cash advance rate depending on the card.

Make The Switch

Once all the research has been done and a new card is found, the application process should be easy.

Most cards now have online applications, which makes it much easier to go from comparing cards to filling out the forms.

With debts transferred to just one card, making payments should be much easier to manage and cut down.