What is Credit Card Consolidation?

What do you do when you're carrying account balances on several different credit cards, all at varying rates of interest? Balance transfer credit cards offer a solution to the ?too many bills to track' problem. If you can consolidate all of your outstanding debt into one credit card account, you can go to work on clearing that one balance up.

With the availability of 0% balance transfer credit cards, it should be possible to move all of your credit card debt to one 0% interest credit card, and get it paid off without accruing more interest.

Should be, that is, if you do your homework first so that you avoid the most common pitfalls of those who try this approach to debt consolidation. The single most important thing to remember is that not all balance transfer credit cards are created equal. You need to compare balance transfer credit cards with one another to see all the features and possible pitfalls side by side.

How to Compare Balance Transfer Credit Cards
There are four basic differences between balance transfer credit cards:

• The introductory APR rate
• The length of time that the introductory rate is in force
• The APR after the introductory rate
• Other conditions

The Introductory Rate is often called a teaser because that's its purpose - to tease you into biting at the deal. There are dozens of 0% transfer balance offers out there currently, though many credit experts warn that the terms are changing fast as the credit card companies make adjustments to deal with those that jump from card to card. In some cases, a slightly higher introductory rate that lasts a longer period or has fewer restrictions might actually be a better choice.

The Introductory Term is the length of time before the regular APR comes into effect. It may be a flat period of time - six months or nine months or something similar - or it may be a conditional term, such as 'for the life of the balance transfer amount'.

The Typical APR is the rate of interest after the introductory period is over. Don't let anyone kid you that this doesn't matter - it does, even if you think that you're just going to move the balance again when the introductory rate is over. It may not be quite as easy to do that as you think - credit card companies are being far more wary about serial balance transfers these days. Before you just lump all your credit card balances onto the first 0% balance transfer credit cards that you're offered, take the time to compare balance transfer credit cards to get the best deal all around. You don't want to end up with an enormous balance on a credit card that's just jumped from 0% to 9%.

Other Conditions can be the most important of the deciding factors. For instance, nearly every balance transfer credit card will bump the introductory rate up if you're late with a payment - but some will also enforce other penalties, including charging all the interest that would have accrued to date. Other cards may require that you make a purchase using the card every month, or that you maintain a minimum balance on the account. In that case, the APR that applies to new purchases could be very important.

Consolidating all of your credit card debt onto one of the balance transfer credit cards can make sense, but doing your homework is important. You can compare balance transfer credit cards at moneyeverything.com, along with all the information you need to make the right decision for the best credit card you can find.