Consolidating My Credit Cards Into A Single Payment, Should I Do This?
Consolidating my credit cards, what does this really mean
? Credit card consolidation is merging together multiple credit card bills to make one single monthly payment. The idea behind consolidating your cards into one payment is to obtain a lower interest rate that is more affordable and comfortable for you to pay towards your credit card balances monthly as a single payment.
You may want to consider consolidating your cards into one payment if you're having difficulty with the following: keeping up with the payments on your credit cards; the interest rates on some or all of your credit cards are too high; and, you're unable to save money.
If consolidating your cards is the route you believe you should take then you may want to consider these tips to assist you along the way:
Tip One:
Consider moving your high interest rate card balances to a lower interest card. If you currently have a card with a low interest rate then you may want to transfer your high interest rate credit card balances to your lower interest card. However, if you do not have a lower interest rate credit card you may want to apply for a card with a lower interest rate that you can transfer your high interest rate card balances to this new credit card.
Tip Two:
Make sure you read the fine print when deciding to make a balance transfer to a low interest rate card. That's right, this is real important for you to do. You will want to make sure you understand all of the fees you may be paying if you decide to transfer your card balance to a lower interest rate credit card. It's important that you really understand what you're getting yourself into before you decide to make that leap.
Tip Three:
Utilizing a home equity line of credit otherwise known as HELOC may be an option for you to consolidate your credit cards. By using a HELOC a homeowner takes advantage of the equity they have built up over the years in their home. In most cases by taking out a HELOC you are able to secure a low interest rate to pay off your cards and end up with a single payment that you will be making on your home equity line of credit. However, just keep in mind that if you decide to go the route of using a HELOC, it is tied to your home and if you stop making your payments on this line of credit you could be at risk of loosing your home.
Tip Four:
You can also consider obtaining a low interest personal loan from a bank, relative or friend to pay off your credit card debt. If you are able to secure a personal loan to pay off your cards this would enable you to make a single loan payment on your personal loan.
Tip Five:
If your credit is poor and you're having problems meeting your credit card payments or perhaps other bills you may want to consider contacting a consumer credit counseling service to assist you in negotiating lower interest rates and payments with your credit card companies.
Overall consolidating your credit cards can be a very effective way to lower your interest rate, reduce and eventually eliminate your credit card debt. Credit card consolidation can give you a peace of mind and empower you to regain control over your spending habits.