The Do's and Don'ts of Consolidating Credit Card Debt

A Credit Article Contributed by Joyce James

The Do's of Consolidating Credit Card Debt

So you've been over spending for so long you hardly know which way is up and your friends are telling you to consolidate your credit cards? You can't sleep because your monthly statements take on real life forms in your nightmares? You can't focus on work, because all you've got in your head are numbers telling you what you owe on your monthly repayments? Seems like you are spending all of your creative energy on trying to figure out which card you'll pay on time this month and which cards will have to miss out...again.

If it has gotten this bad you probably cannot see how to get out of it. You are lost in a credit card debt labyrinth. When Theseus had to go into that ancient Greek labyrinth to tackle the Minotaur he used a roll of string to find his way back out. The difference between Theseus and you is that credit card debt is much much worse than the Minotaur. Still, there is a way out. Read on.

When to Consolidate Your Credit Cards

The whole idea behind eliminating credit card debt is to voluntarily increase your monthly repayments. The more you pay off each month, the less interest you pay and the quicker you pay off the debt. But at this point in your life you really cannot do this, because you can hardly manage your day to day living expenses unless you reduce your monthly payments. You're in such a financial tight spot what you really need is to free up some cash...now.

If you really need to free up some cash in the short term then looking into a debt consolidation loan or consolidating your credit card debt onto the one card so that your monthly payment is lower that what it currently is could well be the only option you have. The time frame of your repayment plan may be extended and you may end up paying more interest, but if you really can't cope as it is then maybe that's the only way to go.

When Not to Consolidate Your Credit Cards

If you are coping with your monthly repayments but are tempted by all the special offers out there that make it seem as if you'll be saving money if you consolidate, don't do a thing unless you research all the offers or see a debt counselor and that you are absolutely convinced that in the long-run you'll be paying less in interest and other fees if you do consolidate. There are good deals around, but you need to be informed.

Keep your eye on all the offers that come in the mail and that you see on the internet. Know how to judge a good offer. Understand that interest rates, membership fees and fees and penalty rates all affect how much you'll be paying and how long it will take you to repay your credit card use.