Credit Card Consolidation: The Easiest Way Out?
Have you ever wondered what the best solution is that can ease off your credit cards debts? If you haven’t heard of any debt solution, here’s one for you – debt consolidation. Debt consolidation is a debt solution that can really give you debt relief. This is also one way to recover from a bad credit rating.
How is credit card debt consolidation done? When you have decided to consolidate your credit card debts, the balances in all your credit cards that have high interests rates will all be consolidated and transferred to just one credit card that has the lowest interest rate.
For you to understand this credit card debt consolidation better, let me give you a concrete example. Let’s say you have 5 credit cards and 4 of which have interest rates that range from 10% to 20%, while one of your cards only has an interest rate of 5%. What you want to do is to transfer the balance of all your 4 credit cards into the one that only has 5% interest rate.
If you will not transfer your 4 credit cards bearing high interest rates, your bill will keep growing and growing and you’ll be locked up in a troubling financial situation. You should really avail of debt consolidation if you want to avoid a scenario like this. Another way to avoid it is stop using your 4 credit cards. Continuously using them can totally ruin your finances.
It’s not easy to deal with credit cards problems. However, to lighten your burden, here are a number of ways on how you can avail of debt consolidation:
1. Look for a home equity loan that has low rate of interest. When you have found a home equity loan, the amount that you will be receiving will be used to pay off entirely all your credit card bills and other debts. Paying all your debts through a low interest home equity loan can somehow lessen your financial worries and stress.
2. Approach a banking institution and avail of a personal loan. Just like when availing a home equity loan, the purpose for applying for a personal loan is to pay off your credit card debts. But before submitting your personal loan application, see to it that its interest rate is much lower than the interest rates of your credit cards.
Credit card debt consolidation is just one of the many debt solutions that you can use to resolve your debt problem.