We know that consolidating credit card debt is a good thing (at least that’s what we keep hearing people say). In fact, the first step in solving credit card debt problems is to consolidate credit card debt. Now, what do you have to do to consolidate credit card debt? Should you go with that enticing ad in the newspaper that says ‘…… Here’s the lowest APR in town’?
The truth is, the first thing to do is keep your eyes and ears open. There are always plenty of offers for you to choose from. Credit card providers are constantly coming out with new and more attractive offers asking you to consolidate your credit card debt with them. However, you must be aware that APRs quoted in bold, such as 0% APR, are only available for the short term (3-9 months). Long-term (or standard) APRs are different. So when you go looking for a credit card to consolidate your credit card debt, you must be keenly aware of these three things (as far as the APR is concerned) – the introductory APR, the introductory APR period, and the standard APR. Let’s look at how each one is important.
The introductory APR is probably the most attractive thing to look for when you want to consolidate credit card debt. If you consolidate your credit card debt onto a card with a very low introductory APR, say 0%, then the first thing you get is a breather/relief in the rate at which your credit card debt is growing. Depending on how long the 0% APR period is (generally, you will seek to consolidate credit card debt with a credit card provider that offers a 0% initial APR), you will be able to at least temporarily break the rate of growth of your credit card debt. The longer the introductory period, the better. However, when you consolidate credit card debt, you should not ignore the standard APR. This is the rate that will be applied to your balance at the end of the low APR introductory period given to entice you to consolidate your credit card debt with that credit card provider. If the standard APR is too high and you know you won’t be able to pay off your entire credit card debt during the low APR period, then that credit card may not be your best option for consolidating credit card debt. However, if you think you will be able to pay off your entire credit card debt in that time, you can make some compromises on the standard APR of the credit card you consolidate your credit card debt with.
The card that is in sync with your current and future financial situation (and needs) is the one you should consolidate your credit card debt with.