The internet has a wealth of resources on how you can consolidate your credit cards. Whether you use a do it yourself method or consult a credit counselor finding a reputable site for ideas to get started will be helpful. You will also want to search for resources on your rights and scams to be aware of if you choose to use a credit counseling service.
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There are several options you should consider if you are sinking into credit card debt and are ready to take steps to get out. Whether you have a few credit cards with minimal balances or several credit cards nearly maxed out, consolidating your debt is a good place to start as you work your way towards a debt-free lifestyle.
Why You Should Consider Consolidating Your Credit Cards
By consolidating all of your credit card debt, you can avoid paying additional interest by keeping your charges on high interest cards. You can also pay down your debt more quickly and manage your spending more easily when you are only carrying one card and receiving one bill. You may also be able to lower your monthly payments while still paying less in the long run.
Your Options For Consolidating Credit Card Debt
Your first option is to consolidate your credit card debt on your own. This is the best method if you only have a few cards with lower balances. You also need to be able to make your payments on time and develop a budget on your own that will allow you to pay off your balance within a reasonable amount of time. Either you can choose the card you currently own with the lowest interest rate and transfer your other balances over to that card, or you can open a new card with a lower interest rate. There are some precautions you must take if you are choosing this do it yourself method to debt elimination.
You may have to pay a transfer fee to transfer balances. Try to find a credit card that does not charge transfer fees.
If you plan to apply for a new card, do your homework and make sure that even if a low introductory interest rate is offered that the rate will not skyrocket after the introductory period.
With a new card, you also need to read all of the fine print and make sure you will not be paying large fees, which will negate any savings in interest.
Another option if you are consolidating debt on your own is to take out a loan to pay off your debt and then pay off the loan. If you own a home with equity in it, you may consider a home equity loan. While you need to be careful to make all of your payments since your collateral with this method is your house, you will benefit from being able to write off any interest you pay on your tax return. If you do not own a home with equity, you can try to apply for a personal loan with a low interest rate, but you will need to have excellent credit to qualify.
Credit counseling services are popping up everywhere since we have become more focused on our spending during this economic down turn. If you have a large amount of debt or cards to consolidate or if you have a hard time sticking to a budget and making monthly payments, you may want to consider using a credit counselor to assist you in consolidating your credit card debt.
The Federal Trade Commission can provide you with detailed information about finding a reputable credit counseling service at. They recommend researching credit counselors online but finding one that you will be able to sit down with in person to discuss your needs and a plan for debt elimination. It is also recommended that you check credit counseling agencies out with the Better Business Bureau to make sure they are BBB accredited and have limited customer complaints filed.
While credit counselors can be a great help in consolidating your debt, lowering your interest rates, getting credit card fees waived, and handling debt collectors for you, there are people taking advantage consumers’ need to eliminate their debt. Be aware if scams and how to avoid becoming a victim. While credit-counseling agencies will often charge a fee, you should be aware of your right to not pay anything until they have met all of their obligations towards helping you to pay off your debt. The Federal Trade Commission describes The Credit Repair Organizations Act of 1996 (CROA), which clarifies the rights of consumers contacting credit counselors.
Do not continue to feel like you are drowning in debt.
By consulting a variety of resources you can get started consolidating your credit cards in order to pay off your debt more quickly and give away less of your money to credit card companies. You can handle this step yourself or you can consult a credit counselor. Just make sure you understand your rights and take the time to do your research.
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- Should I consolidate my credit card debt?
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- Debt Management Plan (DMP)