Credit card debt consolidation is when you transfer multiple debts onto one credit card. Typically, this means transferring balances from other credit cards, but it can also entail paying off store credit cards or small debts with one credit card. There are advantages and disadvantages to using a credit card for debt consolidation.

If you’ve opened your mail lately, you’ve probably seen a credit card offer for zero percent interest or a low introductory rate. The benefit is obvious, little to no interest for a year or two. If you can successfully repay your debt in during the low introductory period, you may indeed save hundreds off interest charges.

However, if you combine all your debt onto one card and fail to repay that debt before the increases, then you paid transfer charges for no reward. In fact, the card you used for consolidation may actually have a higher interest rate once the introductory period is over. Many credit card interest rates balloon to over 20 percent after the first year.

As with any major financial decision, you must weigh your potential risks with the potential rewards. If you have the financial discipline to pay off your debt before rate increases, credit card debt consolidation may be a wise move. Yet, you should be prepared for the consequences if you fail to repay those debts and your new interest rate goes sky-high. Use our credit card debt calculator to calculate your repayment period.