How to Easily Consolidate Credit Card Debt

Credit card debt can quickly get out of hand to the point of it being difficult to make all the credit card payments. This problem leads many to look for ways to consolidate credit card debt as a way to manage their financial obligations.

Though it may seem like a good solution, consolidating credit card debt can create financial hardship if not handled properly. Be aware of the following pitfalls of consolidating credit card debt.

Watch Out for Teaser Rates on Credit Cards

Balance transfers from credit cards with high interest rates to credit cards with low interest rates is one way to consolidate credit card debt. A significant amount of money can be saved as a result of doing this, particularly on credit cards with high balances.

Although this may seem to be a great way to consolidate credit card debt, there are traps people often fall into when using this method. In order to avoid the traps, it's important to be aware of what they are.

The first pitfall to watch out for when it comes to transferring balances from credit cards with high interest rates to credit cards with low interest rates is that many credit cards have a temporary, very low "teaser" rate. This means that eventually the low credit card percentage rate will eventually increase after a specified period of time.

The fine print should be read before applying for a credit card with a low introductory rate to make sure there is not a hidden higher interest rate that will take place after the introductory period.

Avoid the "Empty Credit Card" Temptation

Once credit card balances are transferred from credit cards with high interest rates to credit cards with low interest rates, the credit card with the high interest rate ends up with a zero balance. That's a good thing, but it could be a bad thing if not handled properly.

For instance, once the credit card is paid off, it can easily be charged up again. If that is done, the consumer has a bigger problem than she had before; not only does she still owe all the money that was transferred to the lower interest cards, she has now also accrued additional debt and is even further in debt than she was before.
To avoid this problem, once debt has been transferred from credit cards with high interest rates to credit cards with low interest rates, the high interest rate cards should be destroyed, or at the very least put in a place where the credit card will be inconvenient to use and vow to only use it in case of a serious emergency.