Credit card debt consolidation loans can carry a bit of a bad name in the financial services world.
All too often people lack the resolve to manage their credit cards once paid off with a credit card debt consolidation loan - the end result being not a reduction in their debts, but an increase in their financial problems.
Short term debt management solutions do not mix well with longer term loans, so a credit card debt consolidation loan needs to be factored in to a longer term plan to tackle your personal debt.
By knowing which credit card balances have which interest rates, you can use the debt consolidation loan to pay off the most expensive ones first, thus reducing your outstanding debt and your monthly repayments.
With so many transactions requiring a credit card, you may want to continue using them - in which case there are other debt consolidation routes available which won't involve a loan.
So if you are not prepared to destroy cards and cancel accounts then this loan is going to make things even worse for you.
If you can choose one credit card with good terms for your daily needs, then use your loan to pay off the other credit cards, you'll find the reduction in monthly repayments just the start you need on your journey out of debt.
Another form of credit card debt consolidation is using balance transfer deals to move your outstanding debt to a new card at a lower rate of interest.
You will get offers in the mail that tell you to transfer your credit card debt to this new card and you won't pay any interest on the balance you transfer.
By taking up these deals and transfer your balance, you can reduce your monthly repayments with the much lower introductory interest rate.
Without careful management, using balance transfer deals can quickly lead to a number of new credit cards with high outstanding balances.
Balance transfer deals need to be managed with great care if you're not to end up with a large outstanding balance when the introductory interest rate expires - talk to a professional credit counsellor if you have concerns about the deal.
A debt consolidation loan is the first step to eliminating credit card debt - the next is to manage (or preferably destroy) the existing cards whose balance has been paid off.
Once the cards are cut up, you will find your consolidation loan has improved your finances and lowered your monthly repayments.
