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5 Best Credit Card Debt Consolidation Strategies

Credit card debt consolidation is a strategy where multiple credit card balances are combined into one balance, making it easier to track since there is just one monthly payment and a due date that you need to be worried about.

Credit cards are a great resource when you are in need of extra cash, you can earn great rewards like cash back or airline miles, and you can buy really expensive things and put them on your credit card. But using many credit cards also means that you’re going to have to pay off multiple balances on multiple credit cards.

Credit Card Debt

Trying to figure out a strategy to pay off these debts can look overwhelming, but all it requires is careful planning and can be easily achievable. Below are some very achievable ways in which you can work towards consolidating your credit card debt

Apply for a personal loan

Applying for a personal loan can help you pay off the multiple payments if you have more than one credit card payment due so that you can concentrate on paying back one personal loan debt every month — which will be less overwhelming than dealing with multiple bills.

You can apply for a personal loan through traditional lending units like your local bank or credit union and request a debt consolidation loan.

Or, if you want to skip the long waiting period and the tedious paperwork, you can also apply for fast loans from fintech companies where the application can be completed online, and what’s even better is that these loans often offer flexible terms of repayment, which may vary from 6 to 20 months.

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Apply for a balance transfer card

Transferring credit card debt to a balance transfer credit card that charges no interest for a promotional period of 12 to 18 months is also called credit card refinancing. But if you are thinking of a balance transfer card, you need to have excellent credit, and a balance transfer card comes with a charge.

Apply for a home equity loan

A home equity loan can give you excellent security if you want to pay off credit card debt. A home equity loan is a lump-sum loan with a fixed interest rate and a lower interest rate than other personal loans.

Getting a home equity loan also means that you get the grace of a more extended repayment period, keeping the payments lower. But taking a home equity loan also means you can lose your home if you don’t keep up with payments.

Work with a non-profit credit counselling organization

Working with non-profit credit counselling organisations can help you review your entire financial situation and work with you to create a great plan to tackle your financial challenges regarding credit issues, budgeting, money management, and debt management.

A credit counselling organisation may also help you work with your creditors to set up a debt-management plan on your behalf, which requires you to make a single monthly payment to the credit counselling organisation each month.

Ask a friend or family member for help

As a last resort, you can also ask somebody in your family or a friend to lend you the money. But if you opt for this method, be sure to underline the terms of the loan and talk to them about your repayment plan since you won’t have any legal terms or conditions when you take the loan.

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Alternatives to credit card debt consolidation

You can use a debt snowball method to pay off your credit card debts. With this method, you can target the card with the lowest balance and make extra payments towards that account and pay the bare minimum on all other cards.

After you’ve successfully paid off that card, move on to the credit card with the next lowest balance. With the debt avalanche method, you’ll target the cards with the highest interest rates first.

These methods are a great way to start paying off your credit card debt, but if you are struggling to keep a tab of the money on your multiple credit cards, then choosing one of the credit card debt consolidation methods is a better option. Eliminating credit card debt is essential for you to grow financially and lead a stress-free life

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