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Finances & Money

Crucial Tips for Credit Card Consolidation

December 6, 2019
By Susan Paige
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Credit Card Consolidation typically refers to a situation where you have to put together several credit card balances into one monthly payment. But why do you have to do the consolidation? Well, this will help you to settle your debts at a lower interest rate. Consolidating debts is not easy and will take time, but with the few tips below, you will stand a better chance. 

Apply for a personal loan

Having a personal loan will be essential for your credit card consolidation. The funds obtained from this debt-consolidation can then be utilized to settle your credit card balances. With this personal loan, you don’t have to make multiple card payments but instead, focus on only one payment.

People with excellent credit scores qualify for a low-interest personal loan as compared to what credit card issuers charge. The good thing with these loans is that they have flexible terms that give you the freedom to choose what works for you. You may also opt to have the funds sent directly to your creditors to avoid any temptations of diverting the cash to other areas.

Seek help from friends and family

What are friends for if they can’t see you out of this mess? It will make more sense when you ask for help and get denied. Bring your friends and family into the bigger financial picture and let them help you where they can.

However, do not approach them in the form of a donation. Instead, let it be in the form of a loan accompanied by documentation if need be. Such loans come at lower interest rates and will help you to settle your debt on time in a great way.

Make good use of a balance transfer credit card

There is no better way of transferring your balances from one credit card to the other than the use of a balance transfer credit card. This card comes with low or no interest. You have to, however, be keen on the introductory period timelines. 

Seek professional guidance

Sometimes, the best way to address the issue of credit card consolidation is having a session with the professionals. There is this myth out there that profit credit organizations cannot offer guidance on how to go about your financial situation. This is misguided, and if anything, these are the organizations that can offer the best financial counseling services.

Working with professionals will help you to analyze your financial situation and come up with a workable formula for your financial undoing. These are the same people that will advise you on money management as well as budgeting.

Opt for home equity loans

Borrowing against your home’s equity is an excellent technique for consolidating credit cards. This is because you can use these loans to settle your previous loans.

One thing that stands out about these loans is that they can sometimes have lower interest rates than personal and credit card loans. However, this is a high-risk approach in that defaulting may lead to the loss of your home.

Auto refinance may work too

This refers to a situation where lenders may use your car’s equity to issue a loan meant for other expenses. Credit card consolidation is among the expenses that can benefit from these loans. Unfortunately, there are a lot of risks included, and you may end up losing your vehicle in the process.

Do not let creditors milk you dry with excessive interest rates. Instead, opt for the credit card consolidation tips above to analyze and access low-interest loans to write-off your existing high-interest loans. 

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