When you carry high balances on your multiple credit cards, it is time to choose credit card debt consolidation. When you hold multiple cards, it means that you have to pay different monthly bills of different amounts and often with different and high-interest rates. If you want to get rid of this burden and p[ay off your dues faster, it is better to consolidate all the balances of your multiple cards into a single card. There are a large number of credit card companies who are willing to transfer your multiple card balances but choosing the perfect one is important. It is easy when some useful steps and procedures are followed.
Consider The Scenarios
You have to consider the credit scenario and answer some questions to determine whether or not credit card consolidation is right for you. Determine the amount of debt that you have by gathering all the credit card statements. You must also consider how much you can effectively pay out every month to get off your debt trap as quickly as possible. Consider the introductory offer of the low APR window duration so that you know how much time you have to pay off the transferred amount before the rate reverts to the standard rate of interest which is way above the normal.
Impact On Your Credit
Balance transfers can have a huge impact on your credit rating as well as it has the potential to increase your existing credit score. But to gain this, you must follow some points like keeping the credit balance as low as possible to get the maximum benefit. This will mean that the card which you will be using to consolidate will have a much lower ratio for credit utilization keeping the overall ration the same. You will also have to avoid using and keep your consolidated credit cards aside as the age of an account usually contributes to fifteen percent of credit score. Therefore, closing your old account will damage your credit history.
Check The APR
There is usually an introductory APR of 0 percent offered on balance transfers. Find out whether or not it is applicable to new transactions as well. You can find it out from your cardholder agreement which will state the APR for new purchases and the intro rate that is applicable. Remember that the APR is only for a limited period and the standard rate is much higher than that. Creating a budget and diligently sticking to it will also help you a lot to enjoy the benefits of credit card consolidation and clear your debt fast. You can check out for credit card consolidation loan reviews online and make sure that you are going for the right one as per your need.
Consider The Charges
Zero percent APR does not mean it is free of charges. There is balance transfer fees for credit cards which may range from two to five percent of the amount transferred. You must also try to find out what is in the mind of the credit counselors before choosing one for you. You must only work with certified and accredited counselors, do complete and thorough research and consult your local consumer protection agency and state Attorney General to find their credibility.