Yes, frequently you can refinance credit card debt. Once someone has amassed a certain amount of credit card debt, the situation can quickly become overwhelming. Many people might feel like they will never be able to get their credit card debt under control, but there is always something the cardholder can do.
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Online tools like the credit card chaser are a great way to find the perfect credit card, but some people need help with the debt they have from the credit cards they already own. There are many ways to control credit card debt. Refinancing is a great way to deal with credit card debt. Refinancing combines all of the cardholder’s credit card debt into one bill that is easier to manage. Sources like SmartMoney and Suze Orman offer great tips on this subject.
How can I refinance credit card debt through a home equity loan?
A home equity loan is just one way a credit cardholder can refinance their credit card debt. The reason some people choose a home equity loan is that they can combine other debt with their credit card debt in the home equity loan. This lets the cardholder handle all or most of their debt in one way.
While the cardholder can combine their other debt with this type of loan they should really only borrow as much as they owe on their credit cards so they do not end up with another large payment they find it difficult to make each month. A home equity loan will basically combine all of the cardholder’s credit card debt so they have one manageable payment each month instead of multiple credit card payments.
After the credit cards are paid off with the loan, the cardholder should either cut up the cards or cancel the accounts all together. With fresh, zero balances the cardholder might be tempted to start using their credit cards again. If things get out of control they way they did before the cardholder will find themselves with credit card debt and a new loan to pay off and be in a worse financial situation than they were before.
After the situation with the credit cards has been settled, the cardholder should then focus on paying of the home equity loan as quickly as possible. They should make sure when they are applying for the home equity loan that there is not going to be an early repayment penalty. As long as there is not penalty the cardholder can pay back the loan as soon as they can without having to worry about any added fees.
How can I refinance credit card debt with another credit card?
It is also possible for a credit cardholder to pay off credit card debt using another credit card. To accomplish this the right way, the cardholder needs to find a new credit card with a high credit limit and a low annual percentage rate.
Often the cardholder can call their credit card provider and be approved for this type of credit card if they explain their situation. Once the cardholder has their new credit card, they should then transfer the balance from the old credit card to the new credit card with the low annual percentage rate.
This method helps the cardholder pay off their credit card debt easier since the new credit card has a low annual percentage rate so the amount of interest the cardholder has to pay each month is a lot less than before. Often a new credit card has an introductory annual percentage rate of zero percent. If the cardholder can be approved for this type of credit card, they could potentially pay no interest at all for six months to a year depending on the credit card.
The only way this method works effectively is if the cardholder only transfers their old debt to the new credit card and does not make any new charges on the credit card. It is also important that the cardholder not make any new charges on their old credit card that now has a zero balance. It can be very tempting to start shopping with a credit card with a zero balance, but if the cardholder does this, they will just end up with more unnecessary debt.
It is also important for the cardholder to pay more than the minimum balance of the new low interest credit card each month. Just paying the minimum balance is never a good idea when paying credit cards. Doing this will just cost the cardholder more than their principal debt in the long run.
Is refinancing credit card debt a good idea?
Refinancing can be a great way to pay off credit card debt quickly and for much less, provided the cardholder is consistent with making their payments on time and does not acquire any more debt. This can be hard for many people, but definitely worth the self-restraint once all the debt is gone.
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