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As much as we are burdened by the problem of credit card debt, we can also be alleviated from experiencing the full effects of this problem by acquiring a new card. This is one good option to consolidate credit card debt to reduce our debt obligations.
If you can get a new card, you can use this to eliminate your other debts from your other bills. The caveat is that you have to be extremely careful and wary not to use your newly acquired card for other purposes. Bear in mind that you applied for a card for the sole purpose of reducing your other debts.
Some of us may ask why we should use a credit card in paying our other debt when there's a high probability that this new card will be another source of a financial problem when it is used irresponsibly. But here are some tips to reduce your debt with the use of a new card.
Use the credit card's balance transfers features
Some credit cards allow your debt from another to be transferred to another one. You just have to check if these impose high or cheap transfer fees. Don't use balance transfers if the fees charged are relatively high. It is best to acquire a credit card that don't charge transfer fees at all. Using this feature will give you the flexibility to consolidate credit card debt.
Choose one which has 0% APR interest
There are various time periods where this benefit will last. Some cards will give you 0% APR interest for at least one year while others give you only 3 months. You should look for cards which provide you this 0% APR interest benefit for at least 15 months. You just have to be diligent in your research as those cards which have this benefit feature are rare to look for.
Make big payments to your principal debt
You should leverage on the benefit of 0% APR interest rate. Through this, you can reduce your principal debt of your cards relatively quickly. You just have to pay on time always. Make a large payment, as much as possible, every month or two. Your debt obligations will be nil in no time.
Don't make any more purchases
Remember that you have applied for a new card in order to consolidate credit card debt. Your primary purpose is to pay off your debt obligations. Making new purchases should come in secondary position or not at all. If you make new purchases, these should be for only your basic and daily needs, or for emergency payments.
Maximize on rebates and rewards
Some cards offer 1% to 4% rebates on regular purchases like food, medicines and gasoline. Maximize your savings by using your card only for these purchases. Of course, this should be done only after you have paid for your monthly debt payment with your card. To consolidate credit card debt comes first. Important purchases come second.
It is possible to reduce our debt obligation in a time period which is convenient for us. All we have to do is to find the right approaches and strategies to use in order to meet the demands of these debt obligations. Perhaps, we need the sound advice of financial counselors to do this. Or we should practice frugality in anything that we do relating to making purchases. The final conclusion is that the right kinds of tools are available to us to reduce our debt responsibilities. We should make better use of these.
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