BEST WAY TO CONSOLIDATE CREDIT CARD DEBT |
Posted: January 25, 2017 |
Are you tied up with several credit card balances? Then you must be looking for a convenient method to consolidate credit card debt and experience some relief. A variety of methods is available for you to follow in order to consolidate credit card debt. Here is a list of the most effective methods out of them. 1. Take a look at the credit scores and reports Taking a look at your credit scores and reports for accuracy can be considered as one of the first steps that you could take in order to consolidate credit card debt. If there are any issues with credit reports, you will not be able to qualify for credit card debt consolidation. Three different credit reporting agencies can be found out there for you to approach and request a credit report. They include Experian, Equifax and TransUnion. When you visit one of these agencies, you will be able to get an annual credit report for free. When you have a clear understanding of where your credit stands, you will be able to proceed with the credit card debt consolidation plan. 2. Figure out the options that are available to you When it comes to credit card debt consolidation, you are provided with a variety of options to consider about. You should analyze each and every option available before you select a one out of them. When you analyze the available options, you would realize that some are more affordable to you than others. In case if you have a good credit score, you can think about going for a credit card that is associated with a lower rate of interest. It is possible for you to transfer credit card balances with a high interest into a single card that is associated with lower APR. This will help you save a considerable amount of money that you spend as debt. Personal loans are associated with simple interest. When you obtain a personal loan, you will be provided with a repayment period of three to five years. If you can consolidate all your credit card debt into a personal loan, you will be able to work according to a proper plan. If you feel that you are not making any progress with repaying the credit card balances, you need to realize that you are drowned in a big issue. That’s where you should think about seeking the assistance of a counseling agency. 3. Do your calculations As you already know, credit card debt consolidation has the ability to save a considerable amount of money to you. However, it doesn’t come free of charge. For example, you will have to pay a balance transfer fee. Therefore, you need to do the calculations and make sure that the fees you need to pay don’t outweigh the benefits you get. 4. Keep the credit scores in mind Credit card debt consolidation has the ability to create an impact on your credit in various ways. However, it all depends on the specific strategy that you select. For instance, if you decide to consolidate all the balances into a single card, you should stay away from mixing the credit limit of that specific card. If you do, it would create a negative impact on the credit utilization rate. On the other hand, you would not want to close the old credit cards because they can ding the credit scores. Your credit card utilization would not reduce by keeping all the credit cards open. Therefore, you need to be careful enough to maintain the ratio at a lower level, at least 10% less than the credit limits. 5. Commit yourself to the plan Last but not least, you need to take necessary measures in order to commit yourself to the plan that you have created. We have just touched on the early steps that you need to follow in the long journey of credit card debt consolidation. If you don’t commit, you will not be able to get the desired results in the long run.
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