The benefits from Credit card debt consolidation

“Credit card debt consolidation” seems to be the most talked-about term in the world of credit cards. It is true that credit cards have been very useful and convenient for us and we; in fact, treat the credit cards as a necessity. However, with every good you have evil too.  In the world of credit cards, “Credit card debt” is that evil and “Credit card debt consolidation” is often regarded as a medicine for treating credit card debt.

Anyone who has read any newspaper articles on “Credit card debt” would already have a little knowledge of the meaning of the term “credit card debt consolidation. However, just for the benefit of others, credit card debt consolidation, in simple terms, is the process of consolidating debt that you hold on various high percent annual interest rate credit cards on to just one low, percent annual interest rate credit card. The main benefit of credit card debt consolidation is realized in terms of percent annual interest reduction, therefore a reduction in credit card debt growth. This is touted as the most important benefit (and sometimes the sole benefit) from credit card debt consolidation. However, credit card debt consolidation comes with few more benefits as well. Some of these credit card debt consolidation benefits are widely publicized by the credit card suppliers and some not so much:

1. Initial Rate (percent annual interest rate): As mentioned above, lower percent annual interest rate is the largest benefit from credit card debt consolidation.  Credit card
suppliers use credit card debt consolidation as a tool to attract customers. Offers of a 0% percent annual interest rate for an initial period of 6-9 months of your joining their credit card debt consolidation program with their new credit card.

2. Standard Rate (Lower standard percent annual interest rate, i.e. the long term percent annual interest rate is the other important benefit from credit card debt consolidation. Though not all credit card suppliers offer a lower standard percent annual interest rate, some do design debt consolidation programs with good standard percent annual interest rates. These credit card debt consolidation programs offer a trade-off between initial and standard percent annual interest rates.

3. 0% on purchases: This is another common benefit from credit card debt consolidation. The 0% interest (or some lower percentage) on purchases is offered as an incentive for credit card debt consolidation. This credit card debt consolidation benefit is again applicable only for a short initial period.

4. Easy management: This credit card debt consolidation benefit is not as discussed as others. However, one benefit of credit card debt consolidation (from multiple to single credit card) is the fact that you need to track and manage a lesser number of credit cards.

5. Other benefits: The credit card debt consolidation exercise might bring you some more benefits in terms of rebates, discounts and reward points (especially if you move to a co-branded card as part of credit card debt consolidation).

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