Using cheap credit card debt consolidation loans is a good option if you are carrying around numerous cards in your wallet with balances on them.
Debt can spiral out of control on even the best laid out budgets. Life is not predictable, and just when you think you are on track, the car breaks, or the furnace dies or all the meat thaws in that freezer in the basement and all these repairs tend to have lots of "zeros" in the price tag.
Plus maybe you like a little bit of retail therapy after those bad days at work, and when you get to the checkout, the cashier is offering you a brand new credit card with all the bells and whistles and maybe a don't pay for six months if you spend more today!Credit: morguefile.com
No matter how you got to this point, you need to do something about it, or everyone but you is going to have their hands in your pocket!
There was a time when the only place you could go to get a consolidation loan would be the bank. But they are not the only option anymore. These credit cards that you are trying to get away from, just may be able to help you get back on track as long as you have been making minimum payments all along.
A bank, in most cases will want some kind of collateral, such as your car or house equity. If you have that, and would just as soon go in and talk to the bank, then by all means see if you can get a good deal on an interest rate. But they will want guarantees in return, such as cancelling all credit accounts and cutting up those cards. This may be the best option if you cannot trust yourself again with more credit.
If you feel you are in this situation simply due to bad luck, and don't want to involve a meeting at the bank, and you know that once you get back on track you will not be taking on any new cards or going nuts on spending, then negotiating with a credit card company will be a much easier process.
The best place to start, is with a credit card you already have. If you have several, pick the one with the highest limit, and not a store card. It needs to be a general Visa or Mastercard for example that allows cash advances. Store credit cards tend to be the highest interest and you want to be out of any balance on those as quickly as you can.Credit: morguefile.com
If you can, try and take a day of vacation or get off work eary, as trying to deal with these companies on a weekend or evenings can be difficult. Get all your credit card statements out in front of you so you know EXACTLY where you stand.
Add up all the balances and see if you have room on your Visa or Mastercard if you were to transfer any balances.
If you don't have enough room, then simply phone the card company and tell them your plan. Don't be embarrassed, they are used to these calls. Plus many of these credit card companies are in the business of advancing funds. Especially if it means taking you away from a competing card company.
Have all your information in front of you, so you sound like you know what you are talking about. For example: If you have a Visa card with a $10,000.00 limit on it but also have a $4500.00 balance on it that you have been making payments on, then there is approximately $5500.00 available to transfer any store cards to this card.
Compare interest rates too. Most store cards will charge 19% and higher with many lingering at 28.8% which makes it very difficult to get things paid off.
If your Visa or card company that you are going to transfer balances to, offers a decent interest rate but not the greatest, then phone them up. Tell them your plan and see if they can negotiate a better rate for you. They will only do this if you have been a good customer, but it is worth asking.
You can get them to transfer the funds to pay off these other higher interest cards (make sure you have the other card information in front of you) or some will include checks that allow you Credit: morguefile.comto do this yourself.
If you need more limit to accomplish this task, then ask them if they would consider raising it. I did this once when we were building our house. I needed cash fast for a roofer, and I was able to not only get the limit raised but the cash was transferred into my bank account at a good rate, and then I paid it back when our other house sold. I was surprised at how "user friendly" they can be if you know what you want and have a plan to pay it back.
If you are armed with your information and some are open to their plans for servicing this debt, you can then use cheap credit card debt consolidation loans to your advantage without stepping foot in a bank.
If you use credit properly, it can be a great friend for those emergencies or that great deal, as long as you have a plan in place for paying it back, it can be much easier than using a bank, but if you don't have a plan and simply use the card as you would cash, you can end up paying 3 and 4 times for that "supposed good deal" in interest.
Many of these card companies will make their money on higher interest rates, don't pay for a year, and overlimit usage. If you can avoid these 3 issues, then you will be ahead. There is nothing wrong with the "don't pay for a year" if you have a plan in place and set the money aside ready for paying at the "year" point, but they are counting on you being too busy or simply forgetting.
Credit card consolidation is totally possible, if you take some time out of your busy life, and sit down with your statements and really open your eyes to just what you are paying in interest and fees, and then create a plan with the best card. You will get out of debt faster with one payment instead of a few, and this will give you a chance to get back on track, and that is what we all want right?