Tips on Credit Card Consolidation

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Many people have lost control of credit card payments and gotten behind on payments. Rather than file for bankruptcy they found out that transferring their balance of higher interest cards onto the lowest interest has saved them lots of money each month on interest payments. This helps them to have money for other bills or paying down the principal on the low interest card. This is a smart move to control this debt but if you do not handle these two main problems you can be where you are now, if not worse.

First problem is a lot of people get a new credit card with low interest rate and roll their other cards onto it. This is fine, but you must do your homework. Make sure that the low interest rate is not some introductory offer that is set to increase at some point in the future. Then all the money that you save initially on monthly interest is all gone, and it may be even higher than your original annual rates! This is not good at all so make sure you read all the details and call the bank issuing it if you are not sure.

The second problem has more to do with how disciplined you are with those higher interest cards you now have no balance on. You could be lured to start charging them again, especially if you need something you deem important. If you think you might have problems dealing with those higher interest cards, then cut them up and cancel them. No need to pile an even larger debt than the one you were trying to bring under control.

By following these two tips, you will find that credit card consolidation might be worth tool of your debt reduction strategies.

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Source by Sean Ingram

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