Credit card debt consolidation is a topic that you must have come across countless times. There are tens of thousands of sites with advice and opinion on credit card debt consolidation. Every now and then your favorite newspaper will in addition feature an article or advise about credit card debt consolidation. T.V. stations host panel discussions on credit card debt consolidation. Moreover, there are numerous consultants and companies that give professional counsel regarding credit card debt consolidation. Well, what is this "Credit Card Debt Consolidation" that everyone is yakking about? Why is it such an important subject?
"Credit card debt consolidation" refers to consolidation of the outstanding balance on many credit cards into a single credit card (or a couple of credit cards). Usually, you transfer balances from a higher APR credit card to a lower APR one. You might ask 'why?' If you study how the devilish cycle of credit card debt works, you will at once comprehend the logic behind it. Credit card debt gets bigger in 2 ways. One is due to the addition of new debt from fresh spending on your credit card and the second is due to the addition of interest charges to the already existing credit card debt. The first one is thanks to your purchases with credit cards but the second way is coming from interest charges which are figured on the basis of the interest rate or the APR applicable to your credit card. Therefore a lower APR rate means that your credit card debt will grow at a much slower rate and hence switching to a card with lower APR makes absolute sense.
The method of credit card debt consolidation is also referred to as a balance transfer (you transfer the balance or total debt from one credit card to another). Credit card debt consolidation (or balance transfer) offers are made even more irresistible by the credit card companies by including various benefits with them. The simple logic behind offering these benefits is the fact that their new customer is defecting from one of their competitors. The biggest benefit offered by these credit card companies is 0% interest on balance transfers (or credit card debt consolidation). This 0% APR is typically applicable for a short period of time i.e. 3-6 months, after which the everyday APR is applicable. Other credit card debt consolidation offers comprise of things like interest free purchases for a short period, reward points, etc. These credit card debt consolidation offers make the exercise of credit card debt consolidation even more logical and meaningful.
Credit card debt consolidation seems to be a useful way of tackling the dilemma of credit card debt and that is the reason why there is so much of discussion on the subject of credit card debt consolidation.