Credit Card Debt Consolidation - Why Consolidate Credit Cards?

One of the main reasons why people consider Credit Card Consolidation, is convenience. It is far easier to remember and keep on top of a single monthly repayment, than to make several smaller repayments throughout the month.

Naturally, with many cards to look after, there is more chance of missing a payment and falling into arrears.

The second reason for Consolidating Credit Cards is their costs. The interest rates on Australian Credit Cards are frequently higher than other types of credit such as personal loans and mortgages. If you are unable to pay your debt the cost of interest continues to compound. This can add up to a significant amount, sometimes resulting in you paying more in interest than the price of the original product you purchased with your credit card.

 If you can find a card with a lower interest rate or one that offers a reduced interest on balance transfers – it is better to rollover the debt on your other cards onto the cheaper card.

Credit Card Consolidation can be used as a means of spending control. By rolling your existing debt into a single loan facility (a single card, a personal loan or a mortgage) your available credit limit is restricted any you can not continue to run up bills on all cards over time. This is a great idea for a person who is easily tempted into credit card use.



top of the page