When you consolidate your debts, you replace several debts with one larger loan. One method of consolidating credit card debt is to transfer the balances of multiple credit cards to a new one.
Credit card providers sometimes offer low introductory interest rates or special deals on balance transfers, meaning you might end up paying less.
However, these offers are usually for a limited time period so it is important to look closely at the details and make sure you won't be paying more than you need to once the offer expires, making you worse off.
It is also essential that you read the the terms and conditions of any offers carefully to ensure you are getting as good a deal as you think you are, and watch out for additional fees.
If you move your debt to make it easier to pay back, it is very important that you don’t spend any more on the card; if you do keep spending your situation will only get worse, rather than better.
Credit card consolidation loan
You can also consolidate your credit card debt by taking out a personal loan to pay off your credit card balances. Again, be careful to check the interest rate and terms and conditions to make sure you won’t be adding to your debt, or paying it back over a much longer period of time. If you take out a loan, always repay the credit card debt and destroy the card so that you are not tempted into using it again. If you don’t, you will start to reuse the card, take it up to the maximum permitted limit and, in effect, end up doubling the original debt you started with.
Credit card debt solutions
Always remember that if you have financial problems, you will not solve them by debt consolidation. Moving the debt from one place to another is not the answer if you cannot afford to pay off your debts.
We strongly recommend you get professional debt advice before consolidating your credit card debt. CCCS Debt Remedy, our online debt counselling service, can identify the best debt solution for your personal circumstances, and we can help you every step of the way.