Saturday, July 04, 2009

Consolidate Your Credit Cards - Lower Your Monthly Payments

If you’re like most North American people today, you travel through life carrying a just amount of credit card debt. And if you’re like most North American people, you’re all right with that. $100 per calendar month in repayments is fine, even if you’re paying that much on three different cards. It’s doable – you can afford it, if you have got to. But here’s the thing – if you consolidate your credit card debt, you don’t have got got to.

Do the mathematics with me here: You have a Mastercard, a Visa, a Discover card and an American Express. Let’s state with each of them you’re supposed to pay 12% interest per year, (which would be generous – many cards charge as high as 29% these days!) and the monthly minimum us roughly 2% of your balance that have to be paid back each month. Assuming you owe $2000 on each card, that’s A $40 minimum payment on each card, or $120 per calendar month – before interest is even factored into your repayment equation. But if you’re paying back $40 per calendar month on a card that you owe $2000 on which charges 12% interest per year, you’re paying $280 – Oregon over one-half your repayments – in nil more than interest!

Now see the options when you consolidate your credit card. First of all, you could take out a new credit card and set the balance of all those other credit cards on it. Meaning, you take the debt from your Visa, Mastercard, Discover and AmEx, and you pay it all off using your new card.

Because most credit card offers will allow you to ‘transfer your balance’ from another card to theirs for 0% interest, you might not reduce your monthly minimum payment each month, but you will reduce your interest rate significantly, thus paying your debt off much sooner. Consolidation of credit card debt can reduce your payments by 100s of dollars a year!

Another manner to consolidate your credit cards and lower your amount owing, is to take out a consolidation loan with your bank. Because credit card interest can be up to 29% (even more than in some states) without it being called ‘loan sharking’, many consumers get trapped in a debt rhythm that looks unending. Payday loans are no aid – they can be even worse, in fact. But a consolidation loan with a bank can see you pay all of those debts off at an interest rate of 5 or 6% - saving you a luck on your payments.

But maybe your credit evaluation is atrocious and you don’t believe you can get a consolidation loan, or a credit card to consolidate your old credit card debt – have no fear! There is a battalion of lending establishments whose occupation it is to happen funding for people just like you. Granted, the interest rates will be higher than for person with a good credit background, but it will still be significantly lower than what you’ll wage in credit card fees, and as you pay that loan back, your credit score will quickly get to heal.

There’s just no good ground to carry a huge credit card load these days, and it’s mainly out of apathy or ignorance that so many people do. If you’re inch need of information to assist get out of the load of credit card debt, there are many establishments and debt counseling organisations that tin aid you get out from under the ageless pressure level of debt. In fact, many of them can negociate a better rate with the banks and credit card companies you have money to, to guarantee that you can pay back what you owe without life in poverty.

Credit cards are a convenient tool, but the clip is right for you to consolidate your credit card loan payments and start life well once more.

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