For people who have more than one credit card, chances are good each card has a different interest rate. Making life even more hectic, sometimes these credit cards can have rate increases; leaving already-frustrated consumers feeling even more stressed. What if there was a way to combine all of your outstanding credit card balances into one monthly statement? With credit card debt consolidation, consumers can be proactive in securing themselves a low interest rate and transferring outstanding card balances to a zero or low interest rate credit card.
Here’s how it works: to take advantage of this opportunity, consumers will need to gather all of their outstanding credit card statements and compare them. After investigating which companies participate in balance transfer programs, see if each company is offering a promotional interest rate or will waive any fees to transfer balances from another card to theirs. If so, examine the promotional rate’s terms. Is the low interest rate for a certain period of time or do the no-fee balance transfers require a minimum balance transfer amount? Understanding all of the card’s fine print will help narrow-down lenders to take advantage of the credit card debt consolidation process.
Once a prospective lender or two has been chosen, it is important to call that lender and verify the promotional terms. If satisfactory, proceed with the balance transfer only after attempting to reduce your current credit card’s interest rate to make it competitive with, or even lower than, your guaranteed lowest interest rate. Even by lowering it one percent allows for a faster debt repayment schedule with more money going to principal and less going to interest. After transferring balances from the higher-rate credit card to the lower-rate card, do not cancel the newly paid-off cards. You need to have a good debt to available credit ratio; because if you were to only have a high credit card balance, without any available credit left over, your credit scores would decrease. Should you need any guidance regarding this process, there are many credit counseling agencies available to help consumers regarding the debt consolidation and elimination process.
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