Debt Consolidation Methods for Credit Cards.
There are multiple ways to ease the burden of credit card debt and use debt management consolidation credit card balance methods. With these various methods of credit debt consolidation you can potentially lower balances, lower monthly payments, and lower interest. This can be a great relief to your finances and give you a chance to catch up and pay down high interest debt.
Contact Your Credit Card Company.
This should be your first step. You don’t want to fall behind on your monthly bills. Missing payments could trigger late fees, higher interest rates, and lower credit scores. Call each company individually and explain your situation. If you had payment protection enrollment on your card you’ll be granted a few months with no payments.If not you may be able to negotiate credit card debt with the company for lower payments or balance transfers to save money.Be persistent but polite. If you have made regular payments on time for a while point this out especially if you have been a long time user of the card.Credit: Debt Consolidation Methods for Credit Cards.
Look for Balance Transfer Offers.
If your issuer won’t give you a break you might be able to find credit card relief from another issuer. If your credit is good to excellent you can apply for various credit cards that offer low interest or 0% interest on balances for anywhere from 3 months to 18 months. Keep in mind this is a short term fix. If approved for a balance transfer make sure you make more than the minimum monthly payments and never miss a payment. This will buy you time and allow you to aggressively pay down your debt while not accruing any more interest. Your goal here is to pay down as much of the debt as possible while it is at the low or no interest rate. You will pay a small fee for the transfer but this fee is very low when compared to your interest rate on your existing card. However, with this method you need a good to excellent credit card score.
Take out a Lower Interest Loan.
This is similar to a balance transfer but instead of moving the debt to a lower interest credit card you pay off the existing credit card debt with money borrowed at a lower interest rate. There are multiple ways to do this. Note that these are not for everyone and could end up costing you more in the long run like balance transfer offers if not done properly.
There are multiple options here to use debt management consolidation with other loans. You can take out a personal loan from your local bank. If in school you could take out extra student loans. Or if you own a home you may be able to get a loan against the equity of your home. Keep in mind that for this option to work the interest rate must be lower than your current credit cards debt interest rate.Credit: By Psychonaught (Own work) [Public domain], via Wikimedia Commons
Other Debt Consolidation Options.
These should be a last resort. You can contact debt consolidation programs to help work with you negotiating lower interest rates, payments, and balances. These services often carry fees and you may end up paying back the service instead of the card company. Be on the look out for consolidation scams and consider using debt consolidation non profit services. Only use debt management consolidation credit card solutions like these services if the above options did not work.
Things to Consider When Consolidating Credit Cards
Always make sure the new interest rate is lower than your existing rates. You can use debt consolidation loan calculator websites to help calculate payoff times, rates, and amount saved.
Stay away from car loan title, house loan title, and cash advances services. These are often extremely high fee, high interest loans and you’ll end up paying far more for your debt than if you had simply paid the credit debt down over time. Plus you risk losing your car or home due to defaulting on high interest payments.
Do not keep using your balance filled credit cards. This will only add to your fees and interest balances.
There is credit card help out there both online and in telephone directories from legitimate non profit services. The options above are also viable options for consolidating credit card debt and saving money over the long run.