About consolidating Video chad18
Credit card consolidation can affect your credit in many ways, depending on which strategy you choose.
For example, if you’re consolidating multiple balances onto one credit card, you’ll want to avoid maxing out that card’s credit limit because that will hurt your credit utilization rate (how much debt you’re carrying compared to your total credit limit).
If you’re feeling weighed down by several credit card balances, credit card debt consolidation could provide some serious relief from your financial woes.
Here’s how credit card consolidation works: You first decide if you want to take out a new loan, open a new credit card, or enroll in a debt management plan (more on that later).
Some strategies will be more affordable than others, and your credit card consolidation choices may be limited by your credit standing.
If you have good credit, look for a credit card with a low-interest rate.
Therefore, make sure you are ready to live credit card free for a while.
Credit cards may have a balance transfer fee, so you’ll want to make sure that cost doesn’t outweigh the potential benefit of getting a lower interest rate on your debt. Ask about any loan origination fees, and make sure the loan payment amount is something that easily fits into your budget.You may even qualify for a card with a 0% rate for 12 or 18 months.Personal loans charge simple interest (as opposed to credit cards, which often have variable rates and sometimes have different rates for a credit card balance transfer and purchases on the same card) and they typically have a loan repayment term of three to five years.Be sure to check out any potential online lenders with the Better Business Bureau before applying for a debt consolidation loan online.And you can verify if a lender is registered to do business in your state by contacting your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.
Promotional interest rates expire — like 12 months of a 0% APR on a balance transfer card — so make sure you can repay your debt within that time frame. Failing to pay a personal loan as agreed will hurt your credit, so stay on top of your loan payments and work to build up a solid payment history.