Debt Consolidation

If you ever receive a credit card solicitation that offers zero interest for a limited time (think: too good to be true), it's probably a good idea to check what the interest rate will be when the promotional period is over. It is often anywhere from 22-28%, which can easily make for an onerous nut to cover each month.

As it is so easy for debt accumulation to spiral out of control, debt consolidation is a remedy that a prudent person can deploy to reduce their interest burden. Debt consolidation is one way to manage this problem. There are myriad techniques that can be deployed within the debt consolidation framework, and they can involve both secured and unsecured loan scenarios. Varying loans of over 20% interest, if reduced to 11-12% interest, can result in thousands in savings when paid off.

Bottom line: By collectively bundling debt at high interest and refinancing it at a lower interest, the net out of pocket at the end of the day will be considerably less.

Of course, if you have a bunch of credit cards outstanding at 22%+ interest and the APR on the new one will only be 15% when the promotional period is over, that may be a good deal. When in doubt, just do the math.