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Why You Should Consolidate Credit Card Debt

With times tough financially, a great strategy to help your finances and get back in control of your monthly budget is to consolidate Credit Card Debt. This article looks at how to do this, and how it can help you and your family's finances to get back on track.

First we will briefly look at what consolidation is. In terms of debt, consolidation is getting a personal loan, Credit Card or other financial product is order to pay off existing debts and avoid dealing with collection agencies. A typical scenario would see a consumer applying for an unsecured personal loan to completely pay off two, three or more credit cards.

There are several reasons why you may wish to Consolidate Credit Card debt. The first and perhaps most common reason is to lower your monthly payments. This in turn will provide you with more available capital at the end of every month.

To give an example of the above; three credit cards could have minimum monthly payments of $40, $50 and $60, so by paying off these cards with a single loan the customer will only have a single monthly payment to make which would usually be lower than the combined sum of the three minimum card payments ($150).

Another reason why you may wish to Consolidate Credit Card Debt is to take advantage of special offers and lower rates of interest. Continuing the above example, paying off credit cards that have relatively high interest rates of above 15% APR with a 6.9% APR personal loan will usually result in a saving of interest over the term of the repayment.

Some people choose to consolidate credit card debt simply to make life easier for themselves. It is a lot simpler to make a single loan repayment every month than to keep on top of repayments for a series of credit cards, store cards and small loans. It also allows families to budget more efficiently, as the loan repayment will usually be for a fixed amount and be repaid on a designated date each month.

It is important to note that it is not always necessary to get a personal loan in order to consolidate credit card debt. A common alternative is to apply for a new credit card that offers a high credit limit, and then transfer the balances of smaller credit cards across meaning all of the debt becomes grouped onto the one credit card.

Consolidating credit card debts is one of the most common financial solutions, and can help customers to organize their debts better, get back on top of their finances and even save money in the long term. With a little research it is possible to find the best consolidation option for you and your family. You could benefit from hiring a credit repair lawyer to fix your credit score for you at very affordable and competitive rates.

This post first appeared on Fix Your Credit Report, please read the originial post: here

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Why You Should Consolidate Credit Card Debt


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