The use of credit cards has never been as popular as it has been over the past 5 years.
Unfortunately, this has resulted in the largest US credit card debt figures that have ever been seen.
The issue of personal credit card debt has forced many into looking for ways to lower monthly payments or eliminate this debt altogether.
There are certain methods that can be used to do this: Credit card debt consolidation is the most popular and there are a number of different ways to achieve this consolidation of credit card debt.
1.
Balance Transfers Using Your Existing Credit Cards Check out and list every credit card balance and interest rate.
Contact the card with the lowest APR and ask if they offer balance transfers as part of their service and if they do you should ask the following things:
If you do, then start the process of transferring your balances.
You will probably find that you could save in the region of 5-10% APR by doing this simple exercise.
2.
Balance Transfers Using Introductory Credit Card Offers The same steps apply as to transferring between cards you already have accounts with but this time you will seek out a credit card that is offering a low or even a 0% Apr offer on balance transfers.
The same questions need to be asked as before but with four important additions:
3.
Credit Card Debt Consolidation Loans A popular no nonsense method of eliminating your credit card debt is to take out a low interest loan, very often a home equity loan.
This loan is then used to pay off your credit cards completely leaving you with a drastically reduced single monthly bill.
4.
Debt Management Services.
If acquiring a loan is out of the question because of a poor credit rating or lack of collateral then a debt management company may well be your best choice.
These companies work for you, negotiating reduced repayments with all your creditors not just your credit card providers.
You will be asked to provide all your financial information so they can do this correctly.
After they have drawn up a financial plan outlining what you can comfortably afford to pay each creditor they will start the negotiation process.
They often get vastly reduced payments often as low as 50%.
However, they will charge a fee for this service and an ongoing administrative charge for controlling the distribution of your monthly payment.
Its well worth shopping around as there can be a vast difference in charges and fees and nonprofit organizations tend to offer the best value for money.
However, there are many companies out there that are scamming people left, right and center so it is always wise to check out any company you are considering using.
5.
Negotiate Better Terms Yourself! This should really have been the first option but has been purposely left till last so as to be the last thing you remember reading! Too many people feel that they have no option but to dance to the fiddlers' tune, the fiddler being their credit card company, how wrong they are.
Credit card companies will always say they are willing to help you should you get into financial difficulties, but the reality is that they want you to remain in debt for as long as possible.
Compile your list of debt as with the balance transfer method and request a reduction or a freeze on interest payments you will probably be confronted with an initial 'no' but be persistent and you will find that a reduction will be applied.
Unfortunately, this has resulted in the largest US credit card debt figures that have ever been seen.
The issue of personal credit card debt has forced many into looking for ways to lower monthly payments or eliminate this debt altogether.
There are certain methods that can be used to do this: Credit card debt consolidation is the most popular and there are a number of different ways to achieve this consolidation of credit card debt.
1.
Balance Transfers Using Your Existing Credit Cards Check out and list every credit card balance and interest rate.
Contact the card with the lowest APR and ask if they offer balance transfers as part of their service and if they do you should ask the following things:
- What the limit is on balance transfers?
- Whether or not you are limited as to the number of cards you wish to transfer from
- The fee for transferring your balance
- Whether they offer a reduced interest rate for balance transfers
If you do, then start the process of transferring your balances.
You will probably find that you could save in the region of 5-10% APR by doing this simple exercise.
2.
Balance Transfers Using Introductory Credit Card Offers The same steps apply as to transferring between cards you already have accounts with but this time you will seek out a credit card that is offering a low or even a 0% Apr offer on balance transfers.
The same questions need to be asked as before but with four important additions:
- How long does the introductory rate apply for?
- What rate will the credit card revert to upon completion of the introductory offer?
- Does this offer apply to purchases?
- What are the annual fees if any?
3.
Credit Card Debt Consolidation Loans A popular no nonsense method of eliminating your credit card debt is to take out a low interest loan, very often a home equity loan.
This loan is then used to pay off your credit cards completely leaving you with a drastically reduced single monthly bill.
4.
Debt Management Services.
If acquiring a loan is out of the question because of a poor credit rating or lack of collateral then a debt management company may well be your best choice.
These companies work for you, negotiating reduced repayments with all your creditors not just your credit card providers.
You will be asked to provide all your financial information so they can do this correctly.
After they have drawn up a financial plan outlining what you can comfortably afford to pay each creditor they will start the negotiation process.
They often get vastly reduced payments often as low as 50%.
However, they will charge a fee for this service and an ongoing administrative charge for controlling the distribution of your monthly payment.
Its well worth shopping around as there can be a vast difference in charges and fees and nonprofit organizations tend to offer the best value for money.
However, there are many companies out there that are scamming people left, right and center so it is always wise to check out any company you are considering using.
5.
Negotiate Better Terms Yourself! This should really have been the first option but has been purposely left till last so as to be the last thing you remember reading! Too many people feel that they have no option but to dance to the fiddlers' tune, the fiddler being their credit card company, how wrong they are.
Credit card companies will always say they are willing to help you should you get into financial difficulties, but the reality is that they want you to remain in debt for as long as possible.
Compile your list of debt as with the balance transfer method and request a reduction or a freeze on interest payments you will probably be confronted with an initial 'no' but be persistent and you will find that a reduction will be applied.
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