How to Consolidate Your Credit Card Debt

If you are one that acknowledges their debt and do not see bankruptcy as an option, consolidating your credit card debt can be the answer. In my second year of my credit card debt being consolidated I’ve found a new found freedom. Instead of paying out to 7 credit cards, now everything goes to one monthly payment using a debt consolidation non profit organization

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• patience
• calculator
• pen and paper/ spreadsheets

1. On a sheet of paper create the following columns:
   - Name of creditor
   - Due date
   - Minimum $ payment due
   - Interest rate %
   - Total balance due
   
   Fill out each column for each credit card you have that has a balance you would like to consolidate.

2. On a separate piece of paper total your monthly income after taxes in one column. Total all your monthly living expenses in another column. Subtract your monthly living expenses from your monthly income. You will need to have those figures on hand when preparing to consolidate.
   
   
   If you do not have a consistent paycheck, total up your income for the last three months and divide that by the number three. The figure that you come up with is what you manage to make every month as income, so that is the number you need to work with.

3. Research online the various non profit debt consolidation programs. Google nonprofit debt consolidation. I would choose one that does not charge you; they get their money from the creditors themselves. There are some that ask for a monthly fee to cover their costs. I myself used www.careonecredit.com I allow them to deduct $11.00 monthly to keep track of my credit card debt and make sure my creditors are paid on time. Some of my 19.99 % interest rates the non profit consolidator were able to get lowered to 9.9% and it will remain at 9.0% until my debt is fully paid.

4. When you sign up for a consolidation program an automatic debit is set up with your bank account. Based on you creditor spread sheet and the due dates, figure out what is the best date that you will be able to cover your monthly debt repayment. For some people with a consistent paycheck it may be a little bit after the 1st or 15th of the month.

5. Depending on how much debt you have will you then know how long your payments will be. I found that my credit score went up from 680 to 750 within a year of being a part of the debt consolidation program. Because of my consistent payments it allowed my score to go up.

6. When you total the monthly minimum debt repayments you will find that by consolidating your monthly debt repayment it will be 20% less than what you would be paying without being in the consolidation program. No matter what you would save a whole lot. You can also use debt consolidation calculators to help you get an idea of how long it will take to pay off your debt

7. In order for the plan to work you much be consistent. Any late payments will jeopardize your payment schedule.

Tips & Warnings

• When doing this plan you must commit to pay on time and to not open any new credit cards. You can do it!

[NakedWriter]

on 11/29/2008 Great article. Well needed in today's society.

[amandals20]

on 8/12/2008 Good suggestions to get your cards paid off. I just paid my balances off after three years! What a great accomplishment. May I add, some cards offer 0% interest for balance transfers which are good for a year on average. That is a great way to make a dent in the higher balances without just paying interest.

[luv2blog]

on 6/27/2008 Nice info!