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Credit card debt can be especially tricky to overcome. The perks of cash back rewards, credit card miles and one-time bonuses quickly diminish when you’re facing high interest rates and struggling to make minimum monthly payments. You may have even experienced the pain that comes with having to choose between covering the essentials and paying a credit card bill on time.
Fortunately, there are a few debt consolidation options you can use to overcome your credit card debt. Debt consolidation can also reduce the time it would take for you to overcome your debt than if you were to handle it all on your own.
You're paying too much interest or are stuck making only minimum payments
One or more of your credit cards are maxed out or your credit utilization is over 40%
You miss payments or you can’t afford both your monthly payments and basic needs
Your debt is worsening your quality of life, physically or mentally
If you've found yourself dealing with more credit card debt than you can handle, you may consider refinancing your debts through a form of credit card consolidation. Although this strategy can help consolidate your bills into a simpler monthly payment, each consolidation method comes with consequences and considerations that should be kept in mind.
After her husband's accident and periods of time without work, Amy found herself in a serious debt. Accredited Debt Relief helped her overcome more than $52,000 in credit card and medical debt.
You can reorganize your debt by consolidating your outstanding credit card balances into one debt obligation. This can be accomplished in a few ways:
Consolidating your credit card debt can help you focus on one monthly payment rather than juggling multiple accounts and due dates. Depending on the consolidation method you choose, you may also be able to secure lower interest rates or get out of debt faster than you could by making minimum payments.
The amount you’ll be able to consolidate will depend on which consolidation method you choose and your current creditworthiness. For example, enlisting the help of a debt consolidation service is usually best for people who have $10,000 or more in credit card debt.
Depending on the consolidation method you choose, your credit score could temporarily be affected. For example, if you get a consolidation loan, your lender may conduct a hard inquiry which could result in your score lowering temporarily. However, your credit can improve if you practice good borrowing habits after your consolidation.
Fortunately, credit scores can recover over time. If you make consistent monthly payments, pay more than your minimum, reduce your credit utilization and avoid putting future purchases on credit cards, your credit score will likely improve.
Accredited Debt Relief has helped people across the country consolidate and overcome their debts. With an A+ BBB rating, we offer customized financial solutions that can help you get out of debt. To learn more and receive a free, no-obligation consultation, contact us today.
If you are considering debt consolidation for your credit cards, make sure you avoid these mistakes.
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Considering all the pros and cons of a credit card balance transfer will help you make an informed decision about this option.
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The important thing is to understand the consequences and find out what you can do to get the debt under control.
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