How to Consolidate Credit Card Debt

Credit card debt can be a huge financial burden. Credit card debt consolidation is a process of combining several credit card debts into one in order to get a lower payment for all debts. There are a number of options available in order to consolidate your credit card debt. Here are the steps recommended to take in order to make sure that you get the plan that works best for you.

Difficulty: Moderate

Instructions

1. Determine how much credit card debt needs to be consolidated. If you have a lot of debt you may need to have collateral in order to get a decent interest rate. If you just have a number of minimal debts, you may be in good shape to take advantage of a credit card debt consolidation plan offered by one of your credit card companies.

2. The first thing to try when consolidating credit card debt is QUIT using them. Remember to keep making your payments though. You don’t want to rack up more debt while you are finalizing a program as it could mess up your numbers and the consolidation company might have to reevaluate your offer.

3. Contact all your credit card companies. Get an official quote on the payoff of the debt. In addition, ask them if they offer any consolidation plans and get the details. Typically, they will offer a low interest rate on balance transfers from your other cards. Sometimes this low rate will expire after a certain term. They will probably have to extend your credit limit. They also may require that your other accounts be cancelled as part of the program. It is a good idea to do this even if they do not require it.

4. Check with your bank or local credit union to see if a personal loan will be the best option for credit card debt consolidation. You can also find programs like this online so it is a good idea to check in a few different places. If your debt is low enough and your income is high enough, the bank or credit card debt Consolidation Company will be happy to take over your unsecured debt. This almost assuredly will require that you cancel all of your credit cards.

5. A last resort for some, but a great option is to look into an equity loan on their house to consolidate their credit card debt. This shouldn’t be a last resort though. There are many benefits. This will make your interest tax deductable as well as lock in a low interest rate that is much more reliable than the credit card.

[vernk]

on 7/2/2009 i think we all can use this info!