5 Tips to Consolidate Credit Card Debt
Do you have credit card debt? Do you wish that you never applied for any credit cards? Are you worried about your debt and financial future? If you answered “yes” to any of these, then you need to read this issue, because we will discuss how to consolidate debt. When you feel like all hope is truly lost because you will never be able to pay anything back, there is hope. There are options for you and throughout this article, we’ll go into these options, and we will provide many tips for consolidating your multiple debts. One of the options you will have is the credit card debt consolidation loan.
Credit Card Debt Consolidation Loan
What is the credit card debt consolidation loan similar to personal loan and what does it do for me and can it get me out of debt? A credit card consolidation loan is a loan that you borrow and it is used to pay off your credit card debt that you have. Credit card consolidation loans are meant to be helpful and they help you get a piece of your debt paid off. When you get a credit card consolidation loan, you’re taking that money and putting it into one lump sum, so you can pay your credit cards to balance in one payment. The credit card consolidation loan terms are very flexible they are fit to help those with a large amount of credit card debt make it easy on themselves and giving them the ability to fix their debt problems. Credit card debt relief loans give you the freedom to have a lower fixed rate instead of paying the super high interest that many cards have. There are many people who aren’t aware that they can get a credit card consolidation loan and pay off their existing cards with it. The catch to the credit card consolidation loans is that your credit must around 660 in order to qualify. Some people have already messed up their credit report where they cannot qualify for the credit card consolidation loan, if you are one of these people, there are four more options out there for you.
Nonprofit Credit Counseling
If you tried to get a credit card consolidation loan and were turned down, it’s not the end of the world. There are many nonprofit credit counseling organizations who can help you out or point you in the right direction. These organizations can help you pay off your debt as well. Typically they can help try to set up a plan for you, in order to pay off your debt. The company determines your payments, you agree, then every month, you pay to the counseling company, who in turn pays each of your credit cards. The counseling company has the ability to help lower your interest rate and monthly payments as well. It is not a free service, therefore, there will be a small fee you will be asked to pay to get this going. These companies sometimes require that you close your credit card accounts before they assist you. This can and usually hurts your credit.
Get a New Credit Card With an Introductory Balance Transfer Fee Waived
Credit card consolidation loan didn’t work or, and you do not want to use a credit counseling option, you can apply for a balance transfer fee to be waived. This option will help you transfer your unsecured debt all on to one lump sum. Then you pay on this balance monthly. It may be an easier way for you to pay off your debt. Some cards start you off with 0 interest. There are some who charge 3%-10% on amounts transferred. The amount that you owe cannot be higher than the initial credit limit on this card. If your debts aren’t helped with a card after reading about them, you have more options.
Some retirement accounts will let you take money from your account to help you pay off your debt. One awesome thing about this, there is no credit check for you to be approved. If you are approved, there may be a way to dodge paying the early withdrawal penalty if it all works out. If you’re considering this, put this into perspective, the younger you are, the lesser you can take out, however, there may be a lot of penalties to pay back. If you are under 59 ½, you are expected to pay back the saved money in five years, except if you’re buying a house. Most people warn others from staying away from this option. If you use your retirement money for credit card debt, your retirement is zeroed out and you start fresh from day one. All over again. Think about how hard it was to get this retirement to start with, you don’t want to start all over, do you? If these options are not acceptable, look at the last one.
Borrow Money From Friends or Family
When all else fails, we can always depend on our family, right? There are positives and negatives with this option. When you borrow money from your friends and family, there’s a different feeling towards them. You need to be cautious with these situations. With your family or friends, they won’t give you a credit check, however, if you don’t pay it on their terms, the relationship will be at risk. We don’t like to put our family’s finances in jeopardy either, because we see the direct effects. This is one option that we would choose if we had tried everything else.
No matter what you decide on consolidating your credit card debt, you should make sure you are okay with that decision. When picking what you want to do about your debt, try to avoid opening up a new line of credit and hurt your credit score, because once you do this, and you mess it up, there are not many options to get a redo. Be smarter this time and think it through with your partner and family. You want to make sure you are comfortable with the decision you make in regard to you and your family’s financial future.
Published February 08, 2019; UPDATED May 22, 2019.