“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.

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The reasons these services have sprung into existence is that with the economy being so difficult, with gas prices increasing daily, and prices for so many of life’s necessities going higher and higher, many people are spreading their debt over many credit cards.  The result is an average family might have three or four, or even more credit cards with high debt run up on them and the interest fees being charged can get quite high.

Despite the customer friendly language credit cards use when they try to lure you into running up your debt even higher, these credit cards are making credit card companies a lot of money and they want you to pay them down slowly so they can continue to charge big fees month to month.  The first step for credit card consolidation is to get all of that debt into one account, get rid of the credit card debt, and perhaps close those accounts entirely and get a reasonable interest rate you can deal with over time.
So the first core principle or “basic” of credit card consolidation is getting rid of multiple creditors and getting all of your debt into one account or at least fewer credit accounts.  At the same time, it is preferable to work with a creditor who is willing to work with you with the goal of reducing debt so the interest rate can be set at a level significantly lower than what you were paying to the credit cards.  More of what you pay goes to pay down the debt and less to interest and fees.

One tactic that is often used to move your debt to lower rate interest loans is to use zero percent short term offers from credit card companies.  Now watch those because sometimes there are transfer fees that are as high as an interest payment.  But if you can move several thousand dollars to a zero percent loan for six months, you can then work on paying off higher interest credit cards while that part of your debt is not running up the balances.  But watch out because at the end of the zero percent periods, sometimes the interest rate on that loan will shoot up higher than any of your other loans.

The important thing is that you take charge of your credit and not let it be in charge of you.  Start a log or a spreadsheet where you document each credit card you have, what the interest rate is, the expiration date on short term low rates, what you credit limits are and what your payment amounts will be.  This kind of consolidation of your records will tell you which credit cards need the most attention and where you should look to consolidate two credit cards into one or all of them into the one credit source that you feel you can work with long term.  You then have a partner to help you make a plan to get out of credit card debt and stay that way.

There are a lot of advertisements for credit card debt consolidation.  The first word of caution about using these services is to be careful. A good rule of thumb is that if they have money to advertise on television, they are going to make money off of you in some way shape or form.   If you have bad credit and few resources to access to get that problem under control, the interest rate on the debt consolation could be just as much of a prison as the debt itself.  There are good services out there, so just shop wisely.

It is a good idea to have a strategy for taking up the task of no credit card debt and starting to turn the corner on dealing with the problem.  Part of that strategy is using the resources you have available to solve this problem.  The biggest asset you may own is your home.  Now, most of us are hesitant to use our homes as collateral to get our credit levels down.  But if you have a fair amount of equity in your house, it can be a tool to get a second mortgage that has a favorable interest rate that is capped so it does not float up and down at the whim of the lender.

A good place to start finding a good home equity loan is the lender who is handling the loan now.  If the company that handles your finances now is doing a good job and doing business with you openly and fairly, you can get to them to negotiate a loan that both gives them some interest to make the loan worthwhile to them but gets your debt level under control.  Should the total amount of debt be placed under a 30-year home equity loan at an interest rate of 5-10%, this frees up the budget to handle your expenses and start to see daylight on getting out of debt.

Another option for getting your credit cards under control is a credit management service.  These agencies will take all of your outstanding credit card bills and work with the lenders to come up with a payment plan so they know they will get paid but the amount you have to put out is manageable by you.  Again, these services will have fees but if they can at least put a fence around your rapidly expanding credit card debt situation, it might be a fee worth paying.

The important thing about you taking the first step of seeking help with your credit card debt is that you are taking charge of the situation.  Too often, we feel hopeless and develop a victim mentality when we see those debts just keep going up knowing full well that at some point the monthly payments will overwhelm us.  Reaching out to skilled and qualified services that can give you back some feeling of control over your debt can be liberating to you and give you hope that there may come a time when the trap of credit card debt will no longer hold you captive.  That will be a wonderful feeling of freedom when you finally get relief and able to live within your means again.

Credit card debt reduction starts with reduction in the expenditures you make using your credit card. The first step towards credit card reduction is to go for shopping without your credit card (carry some small amount of cash). This credit card reduction technique is not asking you to stop shopping, instead it is just asking you to seriously evaluate the need of anything you want to purchase and not just purchase it on the spur of the moment.

By the time you go back home to retrieve your credit card, and you must really make the purchase, you will have had time to determine whether this is a necessary purchase.  The short interval is instrumental in killing spur-of-the-moment purchase and lowering your credit card debt. It gives you time to evaluate if it’s really worth going back home and getting the credit card for purchasing that item.

The other effective way of credit card debt reduction is debt consolidation. Consolidating
debt from a high percent annual interest rate credit card to a lower percent annual interest rate works by reducing the rate at which your credit card debt grows.  Using the consolidating method also gives a short interval of relief while there is an initial period when the percent annual interest rate is at 0%.

Besides credit card debt reduction, debt consolidation also brings some additional benefits that are basically rewards or incentives offered by the new credit card supplier. This method of credit card debt reduction is really more than just a credit card debt reduction method – it is a benefit provider as well.   If you are not comfortable in taking forward this method of credit card debt reduction, you can seek the help of a credit card debt assistance company.

Besides these two credit card debt reduction measures, which are really the most important credit card debt reduction measures, there are other methods too for credit card debt reduction. Another one is to ask your current credit card supplier for help in credit card debt reduction by lowering the percent annual interest rate. It might work out for you as it has helped many others.

Also remember, that there are people (professionals) out there who provide advice on credit card debt reduction (just in case you need them).

There are some general guidelines you can use to pick which balance transfers to even consider in the first place for moving your debt.  It is worth your while to be a wise consumer and choose a credit agency carefully because it is a competitive market and, as with anything else, there are good guys and bad guys.  Some guidelines to take into consideration are…

1) If possible, do business with a company that you already have accounts. Not only do you have a history of how they treat their customers, it will not affect your credit score to just use an account you already have established.

2) When moving your debt to an offer for a lower interest rate, make it an offer without an expiration date.  Some very low interest rate offers are only for a few months and really does not benefit you.  It is better to take 3-4% for the life of the loan than zero percent for three months.

3) Keep your eyes open for transfer fees.  These hidden charges can take all of the value out of a seemingly good offer.  Ensure that there are not transfer charges, and make more certain that the information given is truthful.  Read all of the fine print of any offer whether it is from a new credit source or someone you have worked with for a while.

4) Only respond to offers you get in writing.  Stay away from phone solicitors or 
        Email offers.  There are more scams than respectable offers that are done this
           way.

It is also important to keep an eye on the credit ceilings of the offers you are getting.  If the offer is to use an existing credit account, you should know how much credit they can offer you and how close you are to using that credit up.  It is of no value to you to go through the trouble of arranging a balance transfer to try to capture a lower interest rate only to find that they could only accommodate a small amount of the needed funds. 

The other kind of balance transfer, other than just moving debt from one credit card company to another, is to move funds to a secured loan.  A second mortgage is a secured loan because you are putting up your home equity as collateral.  These types of loans are easier to get because you have something to put forward for it but you are taking a risk because of the security you are putting up. 

Use the same sense of good common sense and examining the creditors when you choose a company to take out a secured loan.  Two items you can overlook, that can come back to haunt you, are early cancellation fees and variable interest rates.  If you are putting up your home, you deserve to lock in the interest rate.  And when you look at the final paperwork, look for those early pay off fees.  If everything does not look just right, do not be afraid to get up and walk out.  There are plenty of credit companies out there to meet your needs and you can find one who will do business fairly and honestly with you.  You just have to have the patience to keep looking.

The answer will more often be yes than no. Consolidating credit card debt is often regarded as the first step towards credit card debt elimination. However, even before you move to take the first step towards consolidating credit card debt, you must understand that consolidating credit card debt (or balance transfer) is an action that you are taking to eliminate credit card debt. Consolidating credit card debt is not a means of deferring the problem for later.

Consolidating credit card debt is indeed a good option in more than one sense. Not only do you get relief from the rapid increase in your credit card debt, but also get other benefits too. Offers for consolidating credit card debt are in abundance and are very attractive indeed. Almost all the offers for consolidating credit card debt have an initial low percent annual interest rate, generally 0% (or some low figure). In fact, this is one of the most attractive options used to make consolidating credit debt worth pursuing. 

Besides this low percent annual interest rate, the offers for consolidating credit card debt also include incentives, such as no interest rate on the purchases made during first 5 months (or some other initial period) of balance transfer. In addition, this incentive also lowers the speed at which your credit card debt gallops. So these are the two most important benefits that credit card suppliers deploy to attract people into consolidating credit card debt with them. Other benefits include additional reward points on the member’s reward program of the credit card to which you are consolidating credit card debt. These reward points can be redeemed for other attractive goods, rebates and rewards. Sometimes, the new credit card may be a credit card that caters more to your current spending needs both in terms of the credit limits and the way you spend your money. For example, the new credit card might be a co-branded one offered by an airline that you have started traveling with very frequently in the recent times and consolidating credit card debt on such a card may open up much more benefits. The previous card was likely based on your needs at the time of you applying for that car, however, the new card of which you are consolidating your credit card debt, may open up discount offers to you.

Yes, you can get out of credit card debt. If you are determined to get out of credit card debt you surely can get out of credit card debt. Though it is a bit difficult to get out of credit card debt, it is not impossible. All you need to get out of credit card debt is determination and planning. Both are equally important (or maybe determination is even more important). Determination does not come without proper reason. So, you need to first ask this question to yourself – “What will I get if I am able to get out of credit card debt?” “What difference will it make?”, “What’s in it for me?” or “Is it really beneficial to get out of credit card debt?” Use the answers to build your determination. The fact that all the nagging via letters/phone (by the credit card supplier and/or their collection agent), will be gone, should do good to strengthening your determination and should provide you with a reason on why you should endeavor to get out of credit card debt. Think about the stress-free life after you get out of credit card debt. Try to link various reasons together and try to see the benefits through them. All these collectively will help in bolstering your determination and prevent it from getting weak at any point in time.

The second thing that you need to get out of credit card debt is planning. The planning to get out of credit card debt will start with making a list of the credit cards that you currently possess and noting the debt and the percent annual interest rate for each of them. The sum total of all these various credit card debts, will give you the total credit card debt. You also need to check if you have been defaulting on payments on some of these credit cards (incurring a late fee). You will need to avoid that and put it on the plan you have prepared to get out of credit card debt. The next step to get out of credit card debt, is check your current financial position and make an assessment of the financial position you expect in the future. Next comes the research to check the various balance transfer offers available in the market; to see if one of these can prove beneficial to you. Use all this information to calculate how much time you will require to get out of credit card debt and how you will distribute the debt payment across your various credit cards (ensuring that you payoff the debt that is hitting you the most and also ensuring that you do not incur late fee on any credit card payments)

The issue of excessive credit card debt can be looked at from two angles. First is addressing the excessive credit card debt problem at the industry level and second is the addressing of the excessive credit card debt problem at the individual level, i.e. at the credit card holder level. The first method involves increasing awareness of the excessive credit card debt problem to the masses. This is currently being done. However, there should also be an effort to tackle this problem of excessive credit card debt at an even deeper level. This means trying to devise a mechanism to erase the problem (of excessive credit card debt) with swift and effective measurements. This mechanism should actually be a part of the overall system.

A lot of thought needs to go into devising such a mechanism. Case studies should be taken up, statistics gathered and a proper forum formed (with representatives from the credit card holders and from the credit card suppliers). As of now, the credit card suppliers just seem to be engaged in coming out with new products and getting customers enrolled for those products. There is little attention paid towards addressing the problem of excessive credit card debt in the real sense. Something like attending mandatory seminars on the root causes of excessive credit card debt could be made part of the credit card application process.

Another way of dealing with the problem of excessive credit card debt could be: developing a system for calculation of applicable credit card limit at the individual level i.e. no standard/product-based credit limits. Then there could be mechanisms for proactively warning the users about excessive credit card debt (based on their credit card usage) or even imposition of early restrictions on noticing the first signs that lead to excessive credit card debt.  At the individual level, the treatment of the problem of excessive credit card debt would include following best practices (on credit card usage and avoidance of excessive credit card debt) by the individuals themselves. A checklist or a set of questions could be provided to individuals for recognizing the first signs of excessive credit card debt.

The problem of excessive credit card debt can surely be dealt with by putting together some serious thought at a more broad level together with discipline at the individual level.

If you are looking to eliminate credit card debt, you have already reached 50% of your goal because your decision to eliminate credit card debt is the first and the most important step towards being able to eliminate credit card debt.  It is important to mention that you also need to be firm on this decision and stick to it with complete sincerity and seriousness, until you finally eliminate the credit card debt and continue into the future.

To eliminate credit card debt, you need planning. This starts with analysis of your current situation in terms of your debt and your finances (current and expected in the near future).  To start this process, you must know the amount you own on each credit card and its corresponding percent annual interest rate. 

Once you have this information handy, you can total up the various amounts to get the total amount of your credit card debt. After all, you cannot eliminate credit card debt if you do not know how much is actually owed.  The next step is to see if you have enough cash handy in the various bank accounts that is available for credit card debt elimination, being sure of what will be needed to fulfill the day-to-day and specific future needs.
 
If you find that you have enough to eliminate credit card debt completely, proceed with those elimination plans and earn your peace of mind.  If  the funds do not fully eliminate the credit card debt, use the amount available to partially eliminate the debt.  Carefully review which portion of the credit card debt to eliminate first.  The best choice is to eliminate the debt on the credit card that has the highest percent annual interest rate and is harming your finances the most, moving through the next most highest, until complete.

If you are incurring additional late fees on some credit cards while eliminating debt on the higher credit cards, reserve some funds to make minimum payments on the remaining cards until you are finally able to eliminate credit card debt on them.

What we have read is just some basic analysis and first steps on how to eliminate credit card debt. You may need to take some additional steps to eliminate credit card debt, for example, consolidating credit card debt.  It is important to note that any and all methods to eliminate credit card debt will fail if steps are not made to control spending habits.

Television channels are full of ads related to credit card debt help. There are websites and magazines that are dedicated to credit card debt help. You also hear about the topic of ‘credit card debt help’ being discussed in parliament, along with policies and laws being enacted to assist with credit card debt help.  All types of suggestions and advice seem to be floating around related to credit card debt help.  Even friends have some advice related to this debt help.   Many banks provide credit card debt help by offering through various loan types, generally, short-term loans and low interest rates.

So, credit card debt help is readily available and in fact even unwanted credit card debt help or advice will be offered for your perusal.  However, not everyone offering credit card debt help is proficient enough to be able to provide proper credit card debt help that will suit your needs.

You do need to understand some basics about credit cards and credit card debt, before you actually go looking for credit card debt help or before you start your quest of clearing your credit card debt. You should try and understand how the credit card suppliers bill you, how the interest is calculated on your credit card balance, and how your credit card debt grows. The most critical is to understand everything about percent annual interest rates.

Even if you think that you had gone through this full analysis and research at the time of choosing your credit card, you should revisit these concepts to make sure that you still know them. If you decide against obtaining professional credit card debt help, you will need to understand these concepts in even more detail.

All these concepts will come in handy when you are comparing various balance transfer offers and other debt repair alternatives. Moreover, the knowledge of these concepts will also be helpful in making the discussions with credit counselor more fruitful.

So credit card debt help really starts with developing a better understanding of credit cards and other concepts related to credit cards whether you obtain external help or not.