Definition of consolidating credit card debt
(Some APRs include the annual fee, if there is one.) Consider the balance transfer fee, which results in a higher cost of credit than the APR stated on the balance transfer offer.A transfer APR of 2.9% might look attractive, but add on an upfront fee of, say, 3 percent, and that 2.9% isn’t as low as it seems.Essentially, a credit card debt write-off is an accounting tool that allows the creditor to declare the debt a worthless asset and deduct it as a loss.Typically, a credit card company will write off a debt when it considers it uncollectable.With this option, you replace your multiple credit cards and other bills with a single monthly payment.It helps you pay off your debts within a certain period.
New charges also may have a much higher APR, says Patricia Hasson, executive director of the nonprofit Consumer Credit Counseling Service of Delaware Valley in Philadelphia.
Debt consolidation is good for those people who are unable to pay off credit card debts, personal loans, payday loans, private student loans and medical bills due to costly financial mistakes.
This debt relief option is good for those who want to pay off unpaid debts, manage multiple bills efficiently, pay less on interest rates and save money. This is where the experienced counselors of a debt relief company help you organize an easy and budget-friendly single monthly payment plan.
For instance, an “introductory” rate might apply as a special offer on a brand-new card while a “promotional” rate might apply to a balance that was transferred from one credit card to another, says Rich Bialek, a credit card industry expert and CEO of Bialek Group, a consultancy for financial services companies in Wheaton, Ill.
The primary APR on most credit card transactions is based largely on the credit card holder’s credit score, which includes the payment history on that particular card as well as other forms of credit.
That three-letter acronym looks so simple, but in the world of credit cards, it isn’t. The basic definition of an APR: It’s an annual percentage rate of interest a credit card holder will be charged on all or a portion of the balance if the full amount isn’t paid on or before the due date. For example, a cash advance typically would involve a higher APR than a retail purchase because the card company doesn’t earn a merchant fee on a cash advance, and an advance is viewed as a riskier transaction, Bialek says.