Credit Card Debt Consolidation

Typically, it refers to debt consolidation where the primary (or only) debts are high-interest credit cards. (A consumer is seeking debt consolidation to lower their monthly credit card payments)

Alternatively, credit card debt consolidation can refer to the practice of taking a number of smaller debts at high-interest, and 'consolidating' them onto a single credit card with a better interest rate.

Many credit card companies eager to get your business are pushing this type of 'consolidation', usually offering lower interest rates for 'balance transfers'. These transfers in essence, are indeed 'debt consolidation', as you'll still be reducing your interest payments and combining your debts into one low monthly bill.

Unfortunately, most of us that need debt consolidation services don't have the credit rating to get a credit card with low interest that has the capacity to hold all our higher-interest debts. If you do - it may be a viable option, but be sure to read the fine print and see how long the low-interest is available for.

6 months at 5.9% might be a good deal on balance transfers, but if the rate shoots up after that and you won't be paying off the principal on your debt before then, it's not really a long-term solution at all once the interest is back at it's 'normal' rate.