3 Choices For Consolidating Credit Cards
There are many methods of managing debt but one of the most effective is debt consolidation. This is the process of getting a loan for the total of all your debts and paying them all off with that money, leaving you with a single monthly payment and most likely a considerably lower interest rate. It is especially helpful for consolidating credit cards, because they tend to have the highest interest of any form of debt.
There are basically three ways you can consolidate credit card debt. The first way is to transfer all your existing credit card balances to a single, lower interest card. There are many offers for low interest credit cards - even 0% in some cases.
These cards often offer to transfer your balances from existing cards. By doing this, you can consolidate all your credit card balances in one place and pay less interest at the same time. This will let you pay it off quicker and save a considerable amount of interest.
The second way of consolidating your credit cards is through a debt consolidation loan, either from a bank or some other lender. These loans are also generally a much lower interest rate than the credit cards are, and you will be able to save quite a bit of interest as well as pay them off much faster.
The third way is actually a variation of the second method, a home equity loan. This is a loan or line of credit that is secured by equity in your home. It lets you combine your high-interest credit cards into a single payment and because it is secured by a solid asset, the interest rate is generally very good.
Which method of debt elimination you choose, you need to keep in mind that you are consolidating so you can pay off your debt quicker. Don't fall into the trap of consolidating your current debts into a single loan and then simply adding more debt by charging up the cards you paid off. This is a fast route to serious financial problems or even bankruptcy, so be sure to make a plan and stick to it. You might even want to look at the pros & cons of canceling your credit cards once they're paid off.