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Credit card consolidation can be a beneficial way to pay down debts.  If you are considering this avenue, make sure that you get the lowest interest rate and the best terms available.  Below are the ways in which you can use consolidation to achieve one low monthly payment:

Home Equity Loans 

By putting your house up for collateral, you can obtain a credit card consolidation loan.  Consolidation loans allow you to pay less interest, and make a lower payment than the combined total of all your credit cards.  Caution should be exercised when taking out a home equity loan for credit card consolidation, because you stand to lose your house if you can’t make the payments.  A good rule of thumb is to close all but one credit card account so that you aren’t tempted to add even more debt.

Balance Transfers

This is another method of credit card consolidation.  Basically, you apply for a card that offers a low introductory rate and transfer all your other balances to that card.

Be aware that this “teaser” rate only lasts for a limited time, and will return to normal interest rates at the end of the introductory period.  Before it converts to the regular rate, you can transfer your balance to another card with a low introductory rate.  

Using balance transfers to consolidate your credit card debt often brings added costs in the form of transaction fees.  Read the fine print to see how much it will cost you to make the transfer for your credit card consolidation.  Be sure to make your payments on time, as late payments often raise your interest rate to the normal rate charged.

When using balance transfers to consolidate your credit card balances, be sure to close old accounts so that you aren’t tempted to use them.  Failure to do so can leave you even deeper in debt if you rack up new charges.  

Credit Card Consolidation Services

If your credit card debt is out of control, you can lower your payments by up to 57% using a consolidation service.  Consolidated loans are not for everyone, though.  Before you make a decision, you must realistically look at the pros and cons of debt consolidation to determine if this is the right decision for you. Click here for m

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The Credit CARD Act of 2009 was enacted to reform how credit cards work. Dubbed the Credit Card Bill of Rights, it bans universal default rates, curbs fees, limits penalties, and much more.

On May 22, 2009, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. This new law was established to protect consumers, and especially young consumers, from skyrocketing credit card debt, unfair credit card practices, and deceptive credit offers.  

Most aspects of the Credit CARD Act will be effective on February 22, 2010, nine months after it was signed into law. However, two provisions became effective on August 20, 2009. T

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The problem with imposing new rules on credit card issuers is their ability to quickly circumvent them and come up with new ways to make money.

It’s quite evident if you look at what First Premier Bank, a subprime credit card issuer, has done recently to skirt the impending rule changes set to take effect on February 21, 2010 (Credit Card Bill of Rights).

The First Premier credit card typically comes with a minimum of $256 in fees during the first year for a $250 credit line, but because the new laws limit fees at 25 percent of a credit card’s total limit, it will be lowered.

Going forward, the bank will charge a $75 annual fee for a $300 credit line, but to make up for that lost profit, they’ve raised the APR from 9.9 percent to 79.9 percent.

That’s not a typo, it’s the highest APR tied to any credit card currently on the market, according to an industry analyst.

For cardholders with a $300 balance on the credit card, it equates to about $20 in monthly finance charges; assuming you pay $20 per month, you’d be looking at $315 in fees annually for a $300 credit line. Not a bad h

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By now, you’ve probably heard about credit card issuers paying customers to close their accounts in the wake of one of the worst credit collapses in history.

But the latest move by card issuers is quite the opposite; some are charging customers inactivity fees for dormant credit card accounts.

That’s right, if you fail to use your credit card for a certain period of time, you may be slapped with a fee (in the ballpark of $20) to keep it open.

Of course, it hardly seems worth paying it, given the fact that most credit card issuers do not charge inactivity fees.

However, some consumers have been led to believe that closing a credit card will do serious damage to their credit score, so they may hold off.

And though your credit score could fall as a result of a closed account, it probably won’t mean a whole lot if it’s a card you seldom use.

Additionally, there’s no reason you should pay a fee to keep your credit card open, regardless of the credit scoring impact.

If you feel you must keep it open, consider using the dormant card to pay a recurring monthly bill such as your gym membership or cell phone bill to avoid the inactivity fee.

Remember, the older the card account, the more value it has in terms of credit scoring, so don’t fret about closing a newer credit card.

And if you’ve got plenty of solid credit history, the “damage” to your score will likely be minimal if at all negative (Should I close my credit card account?).

Tip: Keep an eye out for changes to your credit card terms as issuers look to charge new fees to offset the impact of the recently passed Credit Card Bills of Rights.

Recent statistics from the Federal Reserve show that people may be trying to cut back on the amount of credit carddebt they are carrying.

According to the Fed, revolving consumer credit fell by an annual rate of 13.3 percent in September. Most of revolving consumer credit is represented by credit card debt, and a drop could mean that consumers are paying it off.

Ironically, it could also mean that people are having a hard time paying off their credit card debt. Charge offs, which are credit card debts written off by lenders, also play into reductions in revolving consumer credit. Read more…