Credit Card Consolidation or Balance Transfer! What is the difference?
Often these two terms are confused by the general public. Part of my consulting job is to help out our clients with credit card interest rates and issues. Many times people talk about consolidating their credit cards and paying the cards off. What many do not realize is the word consolidation means something different in the banking and financial world. When people talk to me about consolidation; they typically mean to balance transfer their debt from multiple credit cards to one card only. For the sake of argument, this is a type of consolidation but it’s still a balance transfer. Maybe we can call this a “balance transfer consolidation”.
Below are the basic definitions of both terms.
From Wikipedia
• A credit card balance transfer is the transfer of the balance (the money) in a credit card account to an account held at another credit card company.[1]
• Credit Card Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.
As you can see they are two totally different things all together. My services do handle both of these topics. Credit Card Debt consolidation is usually a last resort for my clients if we decide to go that direction. I hope this helps to explain the difference between the two terms. To get more information about how to lower high credit card interest rates go to www.CreditCardNegotiations.com
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