Tips for credit card debt consolidation
Introduction
Credit card debts can be overwhelming and a big financial problem especially if an individual has multiple credit cards. Keeping track of the credit card debt payments can also be quite a strain and as we all know, nobody wants to have a bad credit report due to late payments or failure to pay the right amount due to confusion as a result of having multiple credit cards. However, credit card debt consolidation is here to help. This mainly happens by transferring all the credit card debts that a person has to one credit card which should have a lower interest rate. Credit card debt consolidation makes it easy to make payments and to track the payments and credit card debt balance. Before applying for credit card debt consolidation, it is important to have the following tips in mind.
Step 1
Recheck your credit report
Before applying for a credit card debt consolidation, it is important to go through your credit card report so that you can identify any problem that may exist. Calculate all your credit card debts, define the amount you owe each credit card provider and define what you want. This will help greatly while you are looking for a credit card debt consolidation company to work with.
Step 2
Shop for a good and reputable credit card debt consolidation provider
After define what you want, the next step should be to look for a good credit card debt consolidation company that caters for your priorities. You could do so by visiting the credit card debt consolidation companies around your area and discussing the things that interest you with a service provider, ask for recommendations from family and trusted friends or even hire professionals like attorneys to guide through the selection process. Also remember to look fro a credit card debt consolidation company that offers low interest rates.
Step 3
Double check with the old credit card companies
After selecting the credit card debt consolidation company you want to work with, they will transfer all the debt balances to your new credit card which should be they provide. When they send a notice to you that the transfer of the debt balances is over, call or visit your former credit card providers to confirm the debt balance transfer. Ignoring this step can lead into problems especially if the debt balance transfer was not completed, as the former credit card providers will send you a bill statement at the end of the month and you will have to settle it.
Step 4
Cancel all the old credit cards
After the credit card debt consolidation is complete, you will definitely not need all the other credit cards that you had. It is important to make sure that you cancel them and remain with only the new one. Failure to cancel the credit cards may lead to temptations of using the credit cards and worse still may ruin your credit report as too many credit cards sometimes gives a negative credit score. This will make lenders reluctant to give you money due the open unused credit cards that they would interpret as potential outstanding debts.
Step 5
Stick to the new credit card
After credit card debt consolidation, it is important to stick to the new credit card provider for about a year. This will help to build your credit history unlike jumping from one credit card provider to the other.
Reasons for credit card debt consolidation
The following are the main reasons as to why most people go for the credit card debt consolidation services.
- Credit card debt consolidation helps individuals to reduce the minimum payments that they owe the creditors.
- Most credit card debt consolidation providers reduce the interest with 10% or more.
- Credit card debt consolidation helps the debtors to reduce their pay meant term up to a number of months as opposed to years in the case of multiple credit card debts.
