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Consolidate Your Credit Cards – Lower Your Monthly Payments
By: Christopehr M Luck iSnare Expert Author
If you’re like most North American people today, you go through life carrying a
fair amount of credit card debt. And if you’re like most North American people,
you’re okay with that. $100 per 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 to. But here’s the thing – if you consolidate your credit card debt,
you don’t have to.
Do the math with me here: You have a Mastercard, a Visa, a Discover card and an
American Express. Let’s say 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 has 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 month – before interest is even
factored into your repayment equation. But if you’re paying back $40 per month
on a card that you owe $2000 on which charges 12% interest per year, you’re
paying $280 – or over half your repayments – in nothing more than interest!
Now consider the options when you consolidate your credit card. First of all,
you could take out a new credit card and put 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 hundreds of dollars a year!
Another way 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 in some states) without it being called ‘loan sharking’,
many consumers get trapped in a debt cycle that seems unending. Payday loans are
no help – 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 fortune on your payments.
But maybe your credit rating is awful and you don’t think you can get a
consolidation loan, or a credit card to consolidate your old credit card debt –
have no fear! There is a multitude of lending institutions whose job it is to
find financing for people just like you. Granted, the interest rates will be
higher than for someone with a good credit background, but it will still be
significantly lower than what you’ll pay in credit card fees, and as you pay
that loan back, your credit score will quickly begin to heal.
There’s just no good reason to carry a huge credit card burden these days, and
it’s mainly out of apathy or ignorance that so many people do. If you’re in need
of information to help get out of the burden of credit card debt, there are many
institutions and debt counseling organizations that can help you get out from
under the unending pressure of debt. In fact, many of them can negotiate a
better rate with the banks and credit card companies you own money to, to ensure
that you can pay back what you owe without living in poverty.
Credit cards are a handy tool, but the time is right for you to consolidate your
credit card loan payments and start living well once more.
About the Author :
If you would like to read more of my personal articles like the one listed
above, please visit my
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