Credit Card Consolidation: Another Option

Credit cards and credit card debt is something that millions of people have to worry about daily. The average household carries little more than $15,000 in credit card debt alone. That is a lot to worry about and manage along with a mortgage, utilities, food and other daily expenses. Many of these households don’t know how to manage their essential bills and payments and get out of debt. With so much debt, there are many different options that credit card holders can choose from. One of the best options is to consider credit card consolidation.

Credit Card Consolidation: Definition and Benefits

Credit card consolidation happens when people decide to gather their outstanding credit card balances, apply for a loan and pay off their credit cards. This does several things for a family that is struggling under the weight of credit card debt.

Those that choose to use credit card consolidation to pay off their credit cards will see an immediate effect on their budget. With so many different payments and different payment amounts being due during the month, most people have a hard time staying on budget. With one loan payment, budgets are easier to manage. There is only one payment due and that payment is normally a fixed amount over a fixed length of time.

Not only will a loan give individuals a fixed amount to pay each month, it will also save money. People with credit card debt have interest constantly accumulating. Once the balances are paid in full, there is only one interest rate that is accumulating. Normally, the interest rate on a consolidation loan is lower than the interest rates on credit cards.

Credit Card Consolidation: How to Do It

Starting a credit card consolidation is easier than most people think. The first thing that needs to happen is for debt holders to get a clear idea of the exact balances that are owed on ALL their credit card. It makes no sense to leave one off and have to continue to make payments in addition to the credit card consolidation loan. Once the total credit card balance amounts have been added and decided, many people add an additional 10-20% on to that amount. This additional amount is normally used to help pay the bills that the credit cards are used for.

Once that goal loan amount has been set, it’s time to start looking for a consolidation loan. These loans can be found with banks, credit unions and other places. It’s best to start looking for a loan with a low interest rate and with a trusted and established company.

Once the loan has been secured and the credit cards balances have been paid, it’s best that the credit cards be put away. There are some people that complete the entire process just to add more debt back onto their credit cards. Many of those that do this hide their credit cards until their consolidation loan is paid in full. Credit card consolidation is an option that has helped many find their way back to financial health.

Jan. 23 14'
Would you like the truth, or would you like the same song dance BS that the con artists and grenovment wants you to believe? I will choose the truth, get angry at me for being blunt, or realize reality Here is the Reality check: If you are being turned down for a debt consolidation loan, you are not going to qualify to buy a home for a long time. Especially without a huge downpayment (20-30%) things have (finally) dramatically changed and banks aren't allowing people with bad credit choices in their past to get zero down loans anymore. So, even if you consolidate your credit is going to suffer for a while. If in your shoes, you have one solid plan of action, but it is not a quick fix and it will still be a few years before your dream of home ownership can happen. 1. Both of you take 2nd jobs. If you are charging to survive, you are not making enough money AND are not accomplishing anything month after month. 2. Sit down and make a list of all your debtors, amounts owed and interest rates being charged. Write down the current amount you are paying next to each card/debt. 3. Then take your list and prioritize it highest interest on top to lowest interest on the bottom. Now write in the minimum allowed payments for each. 4. If you have been trying to spread extra money against all the debts you are in good shape as you have the ability without spending any extra money to get these paid off. 5. Put all money from 2nd jobs AND all excess payments above your minimums (that you were spreading between all cards) and put towards the debt at the top of the list. 6. Do this every month and you will be amazed how quicly you pay it off and it is amazing how much quicker your total debt will shrink. 7. This is the most important thing. When you pay your first debt off, take the entire payment (minimum plus excess you paid) and roll down to the next card. Then on that debt you would be paying minimum + the minimum/excess so the debt payoff will begin to snowball. Once all debt is paid, take the money you were using to pay debt and save it for your down payment. Reality isn't easy and going into debt to get out of debt never works. Good luck
May. 26 14'

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