19 - 2012

Best Ways to Consolidate Credit Card Debt

Nothing can be as stressful as finding yourself deep in debt and unable to keep up on your payments. If you find yourself in this situation, it may be time to consider debt consolidation as an option to lighten your debt burden. The main goal of debt consolidation is to lower the amount of bills you need to pay each month to a level that is more manageable. For example, receiving only 2 credit card bills per month instead of 4. Many people find it easier to pay two $50 bills each month than four $25 ones. This also allows you to track the progress you have made paying down your debt much easier. Here are some tips that can help you in your goal to consolidate your debt.  It’s time to consolidate credit cards and move on with your financial life!

Do a “Cash Out” refinance on your home. Home owners can use this method of refinancing to receive some of the value of their home in cash, which can then be used to help pay down debts.

Take advantage of 0% balance transfers. This is the most common way of consolidating your debt, and one of the easiest to do. Keep track of offers from your existing credit card accounts, and transfer debts from other cards onto ones currently offering 0% interest on transfers. This can help save you a lot on your monthly payments, and help get that debt payed off faster.

Apply for a personal loan. Check with your bank or credit union to see if you qualify for a personal loan. Before you consider this option, make sure that the interest rate on the loan is lower than the one you are currently paying on your debt.

Take out a home equity loan. If you own your home, you can can borrow money against the value of your house to help pay off your debt. Since the interest from these types of loans are tax deductible at efile time, based on tax estimators and calculators it can be a great way to help you out of debt. Just be sure to keep up on your payments!

Open a new line of credit. If you still have good enough credit to open a new credit card, consider finding one with very low interest rates and transferring your other debts onto that card. This can help you to reduce your monthly payments and get out of debt much faster.

The following options are not recommended, but are still valid options for getting out of debt. The first is to borrow money from a family member. This can be hard to do if the money is not coming as a gift, and money issues can put a big strain on family relations. If you know for sure you can pay off the loan in a timely manner this option could be feasible, but exhaust all other options first.

The other method that can be used in a pinch is to borrow from your retirement money. This option should only be used as an absolute last resort, as you cannot borrow more money to keep yourself afloat during retirement.

The best option of all, however, is to contact a well rated credit consolidation company. These types of companies contact the creditors for you, negotiate settlements and then set you up with a single monthly payment that counts towards all of your debt. These companies can be very shady and underhanded, so take care to research them well and only choose one that comes highly regarded and has approval from government agencies.

No matter what method you choose to use in order to get rid of your debt, the important thing is that you get rid of it. Carrying around debt can add a lot of unneeded stress to your life, and letting go of it can do wonders for both your lifestyle and your health.  If you end up choosing the route to apply for credit cards online, you should use a comparison site.

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