NEW YORK (MainStreet) —If you thought the financial crisis taught us a thing or two about excess credit card debt, think again: After a few years of paying down cards, consumers are back at it, increasing their average credit card burden to over $15,000.

With a return to high indebtedness comes a desire to lessen its burden– whether through a traditional consolidation service or creative approaches, such as those tempting 0% APY balance transfer offers and personal loans. These options couldn’t be more dissimilar, though, so consider these issues before you embark on either:

Also see: How Paying Just the Minimum on Your Credit Card is a Trap

0% Credit Card Offers Are Only As Good As Your Financial Discipline

If it seems that 0% credit card offer is a savvy way to consolidate high-interest balances and lower your payments, you may be right – but only if you’re the sort of person who can pay down debt quickly.

Teaser introductory rates offered by many card companies are usually only valid for 6 to 15 months, which means you’d need to be certain you can aggressively pay down the debt in that time period.

Consumer finance expert and author, Jennifer Openshaw, agrees with this approach.

"Balance transfer offers can be useful if you already have the discipline to pay off debt quickly," she said. "Otherwise, you might end up worse off than when you started as the interest rate balloons."

If you think you can make significant inroads on debt repayment during the introductory rate offer, this may be your best repayment option. The net impact on your credit will also be positive, for two reasons:

  • 1. You’ll probably be accelerating repayment, thus demonstrating the ability to handle your debt burden more effectively.
  • 2. The ratio between your total debt level and available credit limit will improve, since you’ll have more cards open.

For this reason, you shouldn’t close your existing accounts. As John Ulzheimer, President of Consumer Education at warns, “Don’t close your existing card, because you might hurt your score unnecessarily.”

Another caution: Balance transfer offers sometimes come with associated fees. A 3-5% fee is typical, thus adding that much more to the cost of repayment. And you may not be able to secure enough new credit to transfer all your existing debt to a 0% card – although every bit certainly helps.

Do You Really Need To Consolidate Your Credit Cards?

If your total debt payments are 15% or less of your disposable income, experts such as Ulzheimer and Openshaw say you’re probably at a manageable debt level.

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Even if you exceed the 15% level, consolidation should probably be avoided, unless you’re falling behind on monthly payments or experiencing other economic distress.

“Debt consolidation services usually only make sense if you really can't make your payments -- and if efforts to negotiate a settlement directly have failed," says Openshaw.

Traditional Debt Consolidation Can Impact Your Credit

Your first step should be to negotiate directly with your credit card companies. If they agree to a lower interest rate, you’ll likely reduce your monthly payment without involving a middleman (and incurring a hidden fee that can increase your repayment term or overall costs).

Worse, when you consolidate credit card debt through a third-party agency two things may happen that can adversely impact your credit:

  • 1. Creditors may request you close some of your accounts, thus reducing your overall available credit and damaging a critical component of your score.
  • 2. In some instances, your credit report or score may take a hit if you end up paying off cards for less than your original balance.

Of course, if you’re really in danger of having accounts closed due to missed payments, anyhow, you’re facing the same credit score risk.

Consolidation or an extended payment plan may be a better alternative to missed payments.

A Third Way to Consolidate

Ulzheimer offers a third path for those considering consolidation: using a personal loan to pay off your credit cards. This approach has significant benefits, according to Ulzheimer,

“If you use a personal loan to pay off credit card debt, you'll be converting credit-score damaging credit card debt to almost benign installment debt," she said. "You might not gain much in the interest savings arena, but your credit scores will almost certainly go up, and up considerably in some instances.”

It goes without saying that with any type of consolidation, your goal should be to get yourself out of unwanted debt once and for all. Every dollar you spend servicing debt principal and interest is a dollar you can’t put toward productive investments or other uses – and that may be the most expensive thing you put on your credit card.

Also see: 5 Top Ways Credit Card Companies Trap You