Self Debt Consolidation
Since credit card debt is the debt that gets most people into
trouble due to the outrageously high interest rates charged,
taking some time to reduce the costs associated with them is in
order. The goal here is to consolidate all your current credit
card debts into as few as possible. It's time to take a hard look
at the different credit cards you currently possess, taking
special care to note the interest rate each charges. Credit card
interest rates vary widely and the goal will be to move as much
credit card debt as possible to the card(s) with the lowest
interest rate(s). You will need to call the credit card company
with the lowest rate and ask that the balance(s) from the higher
interest credit cards be transferred.
If you find that the interest rates being offered by the credit
cards you possess are all in the 18% + interest rate range, it's
time to make a call to each of your credit card companies and ask
them if they will be willing to lower the rate. A polite
explanation that you will transfer the entire balance to a
competing credit card and close your existing account if you can't
receive a better rate should help in the negotiating.
Another option is to take advantage of the promotional offers that
many banks use to attract new customers. They will offer a low
introductory interest rate (sometime as low as 0%) for a set
number of months if you transfer your credit card balance to their
card. The issue to be careful about is knowing what the credit
card interest rate jumps to once the introductory rate ends. If
that rate is still lower than your current credit card rates, then
this option is probably well worth while. (NOTE: credit card
companies have caught onto people who simply jump from credit card
to credit card once the introductory rate ends. To combat this,
many have written into the offers that if the balance is moved
again to another card within a certain period - usually 12 months
- the normal, higher interest rate will be retroactively applied
to all outstanding balances).
Being able to move these balances, however, will be dependent on
not having all your credit cards maxed out to their limits and
having a credit report that leads the credit card companies to
believe you will eventually be able to pay off all the balances.
If all the above efforts fail and you have no savings, it's time
to skip ahead to step #8. If you have managed to consolidate your
balances to a few of the cards and lowered your interest rates on
the cards which still have balances, you have saved quite a bit of
money in interest charges, but you still aren't done.
While the balances may have been consolidated, you still have the
credit cards. Keeping those cards is like placing candy in your
pockets and will lead to even more trouble down the road unless
you get rid of them. It's time to take out a pair of scissors and
cut those babies up. Not just the ones that no longer have
balances, but all the cards except the one with the lowest
interest rate (there is rarely a good reason to have more than one
credit card even for those with no debt). You now have a single
credit card, your monthly payments on the same amount of credit
card debt have been lowered, and you passed yet another large test
on your commitment of getting out of debt. Onto the next step...
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. THIS IS IN NO
WAY GIVING ANY LEGAL ADVICE OR REPRESENTATION. THE INFORMATION
CONTAINED HEREIN WAS COMPILED FROM VARIOUS ARTICLES. FOR ANY LEGAL
ADVICE OR REPRESENTATION SEEK YOUR OWN LEGAL COUNSEL.
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