Using Debt Consolidation to Wipe Your Debts Fast
Fed up with payment credit card and loan repayments left, right and center? If you have a number of credit card debts and loan balances you can save yourself hours of stress and a large amount in interest repayments by taking advantage of debt consolidation loans.
Consider a debt consolidation loan. This type of loan is used to pay off all your existing smaller debts and wrap it into one easy to manage loan. In most cases, the payment on that one loan is lower than the payments on all the other items that you consolidated. Here are a few tips for ensuring you get the best deal make the best use of this tool.
First, remember, this does not eliminate your debt. Only you can do that. But a debt consolidation loan can help you reach that goal faster. Shop around for interest rates and terms. Approximately 70% of consumers just take the first deal that comes their way, and the vast majority of those people do not read the fine print. Guess what? That’s the fastest way to land in more trouble. Shop and compare, read the disclosures, and never take a deal with a pre-payment penalty.
Consider a credit card balance transfer offer. Used wisely, these can give you a huge step forward in your debt consolidation plan. Again, compare offers and read the fine print. Try to find a 0% offer, but remember that there are almost always balance-transfer fees and sometimes annual fees associated with most deals. Rarely are even 0% offers truly free. The card charging the highest interest should be transfered firstthe original card and the balance transfer card. Take them out of your wallet, lock them in the safe deposit box, freeze them in a bowl of water, or cut them up. Under no circumstances use either card, period. If you start purchasing again, you’re digging yourself a deeper hole.
Set up automatic payments to the debt consolidation loan or balance transfer card. Make sure the automatic payment covers at least the minimum monthly payment, and will arrive well before the cut-off date. This will ensure you never have a late payment and pay at least the required amount. Send additional payments as often as possible.
Put up a Post-It note on your fridge or in your wallet to remind you of your debt. Yes, you can take it down when company comes, but be sure to post it back up when they leave. This is a way to keep your debt “real”. It’s all too easy to hide away from debt and pretend it doesn’t exist but it will always catch up with you. As you make payments, check the new balance online. Cross out the old (higher) balance, and write in the new (lower) balance. This is a great way to keep giving yourself positive feedback. And it’s fun to watch that balance dive like a submarine!
If you make a balance transfer, set a reminder for one month before the end date. When you get to that point, start shopping around for a new balance transfer offer or a low-rate card, and transfer the remaining balance which is hopefully much smaller!
Balance transfers and debt consolidation loans are tools that can help you manage your debt at a very low cost to you. But those tools have a sharp edge, so use them wisely!
Article by Richard Greenwood, director of savings website http://www.high-interest-saving-account.com.au which compares high interest savings products including online savings account offers from Raboplus and BankWest.
Article Author :Rich_Greenwood
Last 5 posts in Debt Consolidation
- Eliminate Credit Debt - CRA - Credit Reporting Agencies - August 31st, 2008
- Fix Your Finances With Debt Relief - August 31st, 2008
- Few Tips For Credit Card Debt Relief - August 31st, 2008
- Info on Credit Card Consolidation - August 29th, 2008
- Credit Card Consolidation - Pay Off Debt - August 29th, 2008
If you don’t pay on time then you have to Eliminate Credit Debt. When the month is longer than your income - one fact is obvious - it cannot continue for very long - you have to stop the rot.
CRAs, the credit reporting agencies are a central information base for all credit card companies and they receive millions of reports every day. If you are a few days late, it might remain a secret, but if you go over 30 days, they’ve got you. This info will definitely reach your credit report and your score starts to fall. It can… Continue reading
Credit card debt is like a creeping disease - but we can Eliminate Credit Debt and eliminate the disease if we know the rules of the game.
The credit card companies do not want you to know all the rules - they rule when we are ignorant of the rules! Did you get that?
Stores offer cards, gas stations, my old granny and her dog offer cards, and they stuff our mailboxes - how do the US Post Office handle it all? It’s too easy to have too many cards. When you charge your purchases, it doesn’t seem like you are spending… Continue reading
If you are looking for debt relief, then you are not alone. The average household is finding themselves overwhelmed with debt lately. With the cost of living increasing, rising costs and bills to pay, this creates difficult situations when it comes to credit.
Those who find themselves far in debt are having trouble dealing with their finances and finding a way out.
It is enough to try and figure out how you are going to make your minimum monthly payments, but when you factor in other bills and necessities it is enough to make you crazy. If you can figure out your… Continue reading
