Reduce Your Monthly Expenses Through Credit Card Debt Consolidation

Its hard to imagine life without credit cards. Its so easy to get them and even easier to use them. Before you know it you have a wallet full of plastic. The trouble is, eventually you have to pay for what you charge. You start dreading the mailman since you know hell be bringing a stack of credit card bills. You just cant seem to get all those monthly payments made with the money youve got coming in and overdue bills are piling up. If this sounds like a situation you know all too well then you should consider credit card debt consolidation.

The concept behind credit card debt consolidation is that you convert all those individual monthly bills in to one manageable monthly payment. Since credit cards carry relatively high interest rates, a lower monthly payment is possible through credit card debt consolidation because you borrow the funds to pay off the bills at a much lower interest rate. The key credit card debt consolidation tools available for doing this are home equity loans, mortgage refinancing with cash out, personal loans, and credit card balance transfers.

The lowest interest rates will be found on the mortgage refinancing and home equity loans. This is because these loan tools are secured with your home as security. Personal loans are granted based on your track record with a particular lending institution or on your good credit. Credit Unions typically have the best terms on these types of loans. Credit card balance transfers are shifting one or more of your credit card balances to a credit card with a lower interest rate.

If applied properly all these methods of credit card debt consolidation can work for you. The key is that you use them wisely and you resist the urge to add more credit card debt on top of the new loans that you are securing. It will take patience and discipline but credit card debt consolidation can work.

If you dont have a clear picture of how much you owe and at what interest rates you will need to find this out before you start to shop for loans. Of course, you need to know how much to borrow and you need to know at what interest rates it makes financial sense to borrow the money you need. This is the perfect time to get all your paperwork organized. Once you are ready to apply for your credit card debt consolidation loans you will need good documentation. Create a tally of all your income and expenses. Be sure to remember to record interest rates as well as non-credit expenses such as utilities and other regular expenses.

Now that you have a good picture of what your monthly needs are you can begin to shop for credit card debt consolidation solutions. The first and most accessible screening tool is the interest rate. You will probably be surprised at how widely rates can vary. To make credit card debt consolidation a little more complicated, there is no magic threshold at which refinancing is the best move. A rule of thumb is that an interest rate of 2 points less than what you are paying means it is wise to refinance but you will need to look at your own special situation to see how much you can save. With a little homework, a lot of discipline, and some patience you can be well on your way to getting your monthly payments back to where you can handle them

by: David Nalin

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