Let’s talk about, yes, credit card debt consolidation. If you owe a high balance on your accounts, credit card debt consolidation is something that has likely come up before. Here’s what it is:
Credit card debt consolidation means that you consolidate the debt on multiple credit cards onto either a single credit card or a loan from a bank or a credit union. This is beneficial for you because, by using credit card debt consolidation, you’re paying a single bill monthly on an account with a lower interest rate. You want to avoid keeping a balance on your high-interest credit cards.
This helps with the saving money over time. Credit card debt grows because of the interest (err, finance charges) you pay each month on your unpaid balance. A credit card is really just an open-ended loan, and that’s an easy way to get trapped financially. If you make new purchases on your credit card each month and don’t pay it back right away, that money gets added on too.
Many banks, credit unions, and credit card issuers offer discounts for credit card debt consolidation.
They offer these discounts because you’re opening a loan with them through credit card debt consolidation, instead of giving money to a rival financial institution. Many of these financial providers offer discounts, limited-time 0% APR, and other goodies. Check out our post on navigating credit card debt consolidation for more information on your options.