We know that it’s good to consolidate credit card debt (at least that is what we keep hearing from everyone). In fact, the first step towards addressing the problem of general debt is to consolidate credit card debt. Now, what do you do to make this happen ? Should you just go with that attractive ad in the newspaper that says ‘…the lowest APR in the town is available here’?
The first thing, really, is to keep your eyes and ears open. There are always a number of offers available for you to choose from. The credit card suppliers keep coming with new and more attractive offers asking you to choose them. However, you must note that the APR quoted in bold, e.g. 0% APR, is applicable only for a short term (3-9 months). The long term (or the standard) APR is different. So, when you go looking for a credit card to consolidate credit card debt, you must be keenly looking for these 3 things (in terms of APR) – introductory APR, introductory APR period and the standard APR. Let’s see how each one is important.
Introductory APR is probably the most attractive thing to look for when you are looking to deal with your money problems. If you use a card that has a low introductory APR e.g. 0%, the first thing you get relief in terms of the rate at which your outstanding money have been growing. Based on how long that 0% APR period is (generally you will look to consolidate credit card debt with a credit card supplier who offers 0% initial APR), you will at least be able to temporarily break the growth rate.
The longer the introductory period, the better it is. However, you should not ignore the standard APR. This is the interest rate that will be applied to your balance after the expiry of the introductory low APR period that was given to lure you to the supplier. If the standard APR is too high and you know that you will not be able to clear the balance during the low APR period, that one is probably not the best for you. However, if you think that you will be able to clear off the entire outstanding amount during that period, you can make some compromises on the standard APR that you eventually use.
The card that synchronizes with your current and future financial position (and needs), is the one you should make use of to help with your financial situation.