Are credit card balances creating a headache? Feel like digging up a hole and never returning? Well, why not put those plans on the back burner and try a real solution for a change. Consolidating your credit card is a tried and tested solution to deal with these debts and in this article, we’ll cover everything you need to do.
Pull out your credit reports
The first and foremost thing is to check your credit report for any errors and in case you do come across one it’s important to dispute it as errors can deter your chances of qualifying for debt consolidation.
TransUnion, Equifax, and Experian are 3 of the top credit reporting agencies from where you pull out your reports and once you’ve got your credit score sorted it’s time to figure the debt consolidation plan that best suits you.
Know the plans
Credit Card Consolidation
One way pay to pay off credit card debt is through other credit cards. Confused? The difference here is that the new credit card should charge you less interest but get one made you’ll need a good credit score. If you’ve got a good credit score you may even qualify for a credit card that charges 0% interest for the first year.
One of the major problems with credit cards is that they charge varied interest rates. On the other hand, personal loans will charge you a fixed interest rate and can be paid back over a period of 4-5 years thus offering a great alternative to pay off old card debts.
You can get a personal loan from your bank or credit unions but the interest rate you’re charged will depend on your credit score.
Talk to the experts
In case you do not qualify for any of the above-mentioned plans and think you won’t be able to pay off your debts anytime soon it’s time to get some expert advice. Get in touch with credit counseling companies to get details about the best debt management plans.
With these plans, you need make fixed monthly payments to these companies who in turn pay off your credit cards. Full repayment to these companies can be done in a 4-5 year period plus they charge less interest rate as compared to credit cards.
Know the figures
Credit consolidation comes at a cost too and the low-interest rates offered on other credit cards or by credit unions may expire after a while and thus it’s important to pay off your old debts within that time frame.
Irrespective of the bank or debt management agency, always ask about any hidden fees or fines that you may be charged. In case of a personal loan, ensure timely payments as delays may impact your credit score negatively whereas a good track record will come in handy in the future.