4 Steps to consolidate credit card debt

1. Research your current cards - I can unequivocally guarantee that if you have more than 5 credit cards you would have very little knowledge of each card's terms, interest rates and charges. So in order to start the consolidation process you need to educate yourself with the vital statistics of each card you own.

   Once you know all the relevant information it will give you a wealth of knowledge that you will need to move forward and assess which cards are worth keeping and whether there are others that might be worth getting.
   



2. Prioritise which cards to deal with first - Once you've researched each card it's time to start prioritising the ones that need immediate action, those that require keeping an eye on and those that are safe or worth keeping.

   The variables that will determine this priority process will be;
   

   
   
   1. Interest rate
   
   
   2. Card charges including overlimit charges and annual fees
   
   
   3. Number of interest-free days
   
   
   4. How pretty the card looks in your wallet or purse - NOT!
   
   
   
   


3. Set yourself a monthly repayment budget - If you don't set a monthly repayment amount you will find that the credit card debt can become overwhelming. Setting this amount will free you to be realistic about the possibilities.

   Set this amount as high as you can and understand that you may need to make some sacrifices in order to keep to it. Also, set yourself some measurable milestones that you can reward yourself for such as reducing the number of credit cards by 2 or paying your first $1000. Make it something that's not unachievable but isn't ridiculously easy either.
   



4. Plan to consolidate your credit cards - You will have quite a few options here to eliminate the debt and it will depend mainly on your own self-discipline and motivation for consolidating the debt in the first place.

   If you're not a strongly self-disciplined person the best option may be to apply for a personal loan with a fixed interest rate and monthly payments. You could consolidate all your credit cards into this one loan or at least some of the higher interest charging cards.

   Another option may be to transfer the debt onto fewer credit cards. If you had 3 cards that were okay after your priority process, 4 that were middle of the road and another 3 that were really bad, try spreading the debt from the 3 really bad cards onto the other 7 with a preference for the best 3.

   If you were really self-disciplined, you might even consider moving all your credit card debt onto your mortgage and increasing your monthly repayments. To do this would require paying more that the minimum monthly mortgage payment so as to counter the compounding effect on a long loan such as your mortgage. If you chose this method of consolidation you might want to consider keeping one credit card for emergencies (spontaneous buying impulses are not emergencies!) and reducing the limit to $500 or $1,000.