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reward credit card debt consolidation

reward credit card debt is a nightmare of a problem and unfortunately there a lot of people who face this today (and if others don’t pay heed, they might get trapped into reward credit card debt too). reward credit card debt consolidation is generally regarded as the most important step in reward credit card debt reduction and elimination.

So what is ‘reward credit card debt consolidation’?

reward credit card debt consolidation is the process/strategy to consolidate debt from multiple reward credit cards into lesser number of reward credit cards (ideally one or two reward credit cards). reward credit card debt consolidation is sometimes also referred as a balance transfer where you transfer your balance on one reward credit card to another reward credit card. Generally, the balance transfer (or reward credit card debt consolidation) is done from reward credit cards with higher APR to reward credit cards with lower APR. reward credit card debt consolidation can also be achieved by going for a bank loan (at a lower interest rate) and using that towards paying the debt on the higher APR reward credit cards. This loan is then paid-back to the bank in the form of monthly instalments.

As you would have noticed, a lot of reward credit card providers and banks keep coming out with attractive offers for reward credit card debt consolidation (or balance transfers). There is no dearth of 0% APR offers for reward credit card debt consolidation. However, reward credit card debt consolidation is a serious exercise and you must exercise caution so that you don’t get into deeper trouble. When going for reward credit card debt consolidation, you must properly analyze the offers from various banks and reward credit card providers. Check the time period for which 0% APR is being offered and also the APR that would be applicable after the lapse of that period. Generally, 0%APR is valid for a 6-12 month period only. So, if you are confident of paying back a considerable amount of debt in that period, this kind of reward credit card debt consolidation will work for you even if the APR (post 0% period) is a bit higher. However, if that is not the case, the long term APR is going to be the most important thing for you. If the long term APR is more than the APR for your current reward credit card, this kind of reward credit card debt consolidation will be futile for you. Also, check processing charges etc before you actually go for balance transfer or reward credit card debt consolidation with another provider/bank. Another good idea is to check with your current reward credit card provider and see if they can offer a lower APR to you in order to help you in clearing off your debt (you would be surprised that they do oblige at times and hence eliminate the need for reward credit card debt consolidation).

It’s important that, with reward credit card debt consolidation, you also inculcate good spending habits; otherwise reward credit card debt consolidation would really be of no use to you.