This guest post comes courtesy of Consolidated Credit.
Credit card debt consolidation provides a means for you to regain control of credit card debt when you overspend and the monthly bills begin to exceed what you can afford. With debt consolidation, you can simplify your payment schedule, reduce your monthly obligation and avoid damaging your credit by missing payments. So how do you consolidate debt successfully?
The first option you can consider for do-it-yourself debt consolidation is called a credit card balance transfer. This method allows you take the existing balances from your high interest credit cards and transfer them to a new credit card that has a much lower interest rate. By consolidating the debt at a lower interest rate and reducing the payment schedule to just one payment on your debts per month, you end up paying less in total than you did on all of the debts separately. What?s more, since interest charges don?t build as fast on the debt, many consumers often get out of debt sooner even while paying less each month.
Bear in mind if you decide to use this strategy, you need to find the credit card that has the lowest possible interest rate for balance transfers. Be sure to specifically look for the interest rate (APR) on balance transfers, since this is almost always different from the standard interest applied to your regular purchases. Some credit cards may offer low APR on purchases, but high APR on balance transfers, so you need to make sure you have the right credit card for the job.
You can go online and do a search for balance transfer credit cards in Canada. If you have excellent credit, you may even be able to find a card that offers an introductory zero per cent interest on balance transfers. This means that for a limited period of time (usually about six months), every payment you make goes directly to reducing the principal debt instead of covering interest accrued during the month.
A second do-it-yourself debt consolidation option is to use an unsecured personal debt consolidation loan. In this method you take out an unsecured loan through a bank, credit union or other financial institution and use the money from the loan to pay off your credit card debts. With zero balances on your credit cards, the only unsecured debt you should have left is the loan. Assuming you have excellent credit scores, your debt would have a much lower interest rate with a debt consolidation loan and often better payment schedule as well.
If you have bad credit, you can still consolidate your debt, but you will need the right assistance. Contact a not-for-profit credit counselling agency to speak with a trained credit counsellor about consolidating your debt with a debt management program.
This guest post comes courtesy of Consolidated Credit.
Source: http://www.givemebackmyfivebucks.com/2012/12/17/do-it-yourself-debt-consolidation-options/
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