How to consolidate credit card debt?
March 24, 2010 by admin
Filed under credit card debt
I currently owe $12,000 from my credit cards and am looking for the most effective way to consolidate this debt. I’d appreciate answers only from those who have either done this before or have expertise in the field. Thanks in advance.
Amy Boyack on Wed, 24th Mar 2010 10:04 pm
I write a blog about this very thing and you would be wise to consider a program that can help you pay off all of your debt and look at the entire financial picture. For instance, do you own a home? That is also a debt that can last a long time if not addressed. There is a program that will look at your entire financial picture and then tell you the best thing to do with your money at any given time. This will help you pay off your debts in the fastest time and then build your wealth in the fastest time. It’s pretty incredible.
- Midas - on Wed, 24th Mar 2010 11:10 pm
One very common form for consolidating credit card debt is to transfer the balances of your higher rate cards to a credit card that has a lower annual interest rate.
In your case, let’s say you may have three credit cards with balances of $4,000 each, and those cards may carry an annual interest rate of 17 percent, 18 percent, 20 percent, or even more. Obviously you should be able to save a significant amount of money each year in interest by moving those balances to a card that carries a lower interest rate. For example, you may be able to transfer the balances of those higher-rate cards to a different card that carries only a 13.5 percent interest rate. Even on a balance that is currently being charged only a few percentage points higher, such as 17 percent, you will save significant real dollars — certainly enough to consider this as a method for consolidating credit card debt.
Before you immediately transfer that balance, there are a number of pitfalls that you may overlook when consolidating credit card debt in this way.
There may have some hidden fees as well. So, ask for details before sign up for those cards…
bluedevilstudent on Thu, 25th Mar 2010 2:52 am
If your credit cards all have the same APR, or interest rate, then there is really no need to consolidate these credit card balances. However a balance transfer to another credit card at a lower interest rate could help you pay down your balances much faster – as more of your monthly payment amount would be applied toward your principal balance instead of just being applied to finance charges.