Things You'll Need:
- credit card statements, access to credit card information, access to equity line information
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Step 1
Assess the situation. The first thing you need to do to consolidate credit card debt is to compile a list of all your credit cards. When you are compiling the list, be sure to write down the balance you have on each card and the interest rate you are paying on each card. You will need this information to make a decision on the best way to consolidate your credit cards later.
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Step 2
Research lower interest credit card options. There are a plethora of credit card options available, especially to those who have good credit and a decent income. Do your homework to compare available credit card options. See if these cards offer lower interest rates than your current cards and be sure to read the terms and conditions of the card offers. You can visit websites that allow you to compare credit card options side-by-side to determine if one of these cards may be better than the credit cards you have.
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Step 3
Use your savings. Another option to reduce credit card debt is to use your cash savings to pay down or pay off the debt. Chances are, you are paying a much higher interest rate on your credit card balances than you are receiving in interest on a savings account.
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Step 4
Obtain a home equity line of credit. Homeowners have the option of using the equity built in their home to establish a home equity line of credit. Usually, equity loans have a lower interest rate than credit cards. Generally, home equity loans are tax deductible, where credit cards are not. Therefore, establishing a home equity line of credit to consolidate and pay off credit card debt can be tax beneficial as well.
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Step 5
Close accounts and cut them up the cards. Whether you decide to transfer credit card balances to a new lower interest credit card, use your savings to pay off your credit cards or consolidate with a home equity line, close the account for and cut up your high interest rate credit cards. Keep at least one credit card for emergency purposes, but there isn't really a need to have numerous credit cards in your possession.
