While there are several avenues available for those who want to get debts in order, credit card consolidation is the one that most people in debt look to first. While it does seem like a convenient and straightforward solution, it’s not as easy as you might think, and it’s not the best option for everyone.
If it is the right option for you, it offers many benefits. Imagine being able to combine all of your outstanding credit card debts into one debt and make one payment every month on that one solo debt. It will be a lot easier to handle. Plus, after using the loan to pay off all of the credit cards, your score will likely improve over the next few months.
The possibility of saving money on interest rates is an added benefit, depending on your debts’ current rates. The interest on the loan might be considerably less. However, if your credit score is already deficient at this point from all of the late payments, then it might be hard to get a loan at a low rate. Weigh in your options carefully.
Remember that credit card consolidation doesn’t necessarily mean that you have to go the traditional route of getting a loan. There might be a way you can make credit card balance transfers by moving existing balances with high interest to other cards with low interest.
Credit Card Consolidation With a Low Interest Rate
The percentage of the limit you have used up affects the interest rate. For instance, if you have a $2,000 limit card and owe $1,800 on it, you will likely have a higher interest than a card with a $2,500 limit and a $500 balance. If you think you qualify for a new credit card with a 0% APR introductory fee on a balance transfer, consider applying for it. Do so only if you are confident that you will get it.
There might be other, less drastic options available to you, such as a debt management program. This service is a type of professionally-assisted program that will help you set up the best repayment plan possible that you will be able to afford. A certified credit counselor will help you every step of the way. They will likely be able to help you reduce or even eliminate some interest charges.
If you think any of these credit card consolidation options would be right for you or want to learn about other possibilities, request assistance from a group like CuraDebt. Get a FREE estimate to find out how much you can save and what some of your options might be.