The times are certainly not good for this country’s economy. The rising credit card debts amongst the US citizens seem to have taken a huge toll on their daily life patterns. Credit card consolidation has come up as a good solution to the credit card debt issues. Aside from helping people get rid of their credit card debts faster, credit card consolidation makes sure you reach your financial goals without trouble. Credit card consolidation is a great way to deal with the hassles of multiple credit cards and the high interest rates that they come with. This lowers the monthly payments and helps you keep a control on your budgets.
Credit card consolidation can be done in different ways. Each of these ways comes with certain advantages and disadvantages. The following are some of the important ways of consolidating credit cards.
- Consolidation loans – These loans help consolidate multiple credit card debts into nothing more than a single debt. The debt consolidation loans are secured loans and are generally backed by collaterals. There are several financial institutions that are known to offer debt consolidation loans. These include the loan companies, traditional banks and credit unions.
- Balance transfer techniques – The credit card balance transfer technique is a great way to consolidate credit card debts. You start with buying a low interest credit card and take advantage of the zero-interest period that usually comes with them. Go ahead and transfer all of your existing credit card debts onto the zero-interest card. Make sure you’re treating the new debts as seriously as you used to treat your old debts. Pay them off before the zero-interest introductory offer lapses and save yourself a considerable amount of money.
- Home Equity Line of Credit– The Home Equity Line of Credit (HELOC) helps people pay off their high interest credit card debts with the help of a line of credit. The rate is tied to the prime rate published in the Wall Street journal on a daily basis. The prime rate decides the charges on the banks for borrowing money. Be sure to make your monthly payments regularly if you’re using HELOC. You’re going to lose your home due to foreclosure if you default on your loan.
- Debt Reduction – This involves following the Snowball Plan, where you start with the low interest credit cards and pay your credit card debts in full. You again momentum with time and will be free of debts sooner than your realize.
The aforesaid are some ways of consolidating credit cards. Not only will these help you get rid of your creditcard debts, but they will ensure you reach your financial goals without the slightest trouble as well.