A Quick Credit Card Debt Consolidation – DIY Guide

If you are experiencing debt problems, then you are not unique. Statistics have shown that in our country on an average, people have eight credit cards and an average debt of $ 9340. An inflated rate of interest of 18-25% (mainly credit cards) is just one of the reasons attributed to why the debt has grown at an annual rate of 5%.

With the growth in debt problems throughout the country, there is also consistency as to the accelerated emergence of debt consolidation credit card services. These companies generally propose resolutions to help combat your debt problems with charging fees or without.

If you are careful enough, you can consider debt consolidation yourself and keep your rates by consolidating your debt repayment.

You should negotiate terms with your creditors and ask to reduce interest rates and late fees which usually are the biggest obstacle to absolve debts. With that accomplished, you have to create a budget and comply with diligence. You should review your tax status of the cases so that you can have more control over your income.

DIY Debt Consolidation

In general, the first reconcile debts include those bearing a higher interest rate. Once you take care of the debts, you'll notice a big difference in your monthly budget. And if you're looking to reduce the interest given to the creditors by covering less debt, a do it yourself debt consolidation could be a smart choice. Here are some steps to follow when considering debt consolidation.

Prioritize debts by organizing a list of your debts (with creditors) and the rank order of priority. Next calculate affordability by building a list of your regular income, including wages, any state benefits, child tax credit, child tax benefit, work tax credit, and so on. Then calculated how much you can spend a month on of all debts.

Once this is done it is time to contact your creditors. Choose whom to pay first by determining whether your creditors are still in control of the debt or if they've sold off your debt to a collection agency. If the creditor controls the debt, you can prevent further contact, if the statute of limitations expires. This can be done by sending a letter. If your debt is turned over to a collection agency, is better than forcing them to corroborate the claim before you start paying.

You should discuss the terms with creditors and ask to reduce rates, thus reducing the payment of inflated interest debts. Also, make sure that your total monthly debt payment does not exceed what you can afford. While you are purchasing a declining level, is able to negotiate waiving late fees.

If you have several credit cards with a low debt amount to each, you will be able to consolidate them doing a balance transfer. This is administered by transferring balances to different cards one with a lower rate of interest rate or 0%. Therefore, one could achieve a single payment instead of multiple payments on all cards and pay much less in interest. However, before committing a balance transfer, make sure to examine the conditions of the 0% APR card and check for a period of sustainable introduction. This is because if the introductory period is quite long, you will have enough time to pay the total levy rate of 0%.

When considering the DIY credit card debt consolidation, self-control is extremely important. Be accurate when formulating the budget and you'll soon will be going to live a debt free life once again.

The Right Way To Consolidate Debts While Labeled as Bad Credit

Any person looking for bad credit debt consolidation can find cost efficient solutions online.

If you have bad credit history, consider applying for a debt consolidation loan. Bad credit isn’t the end of the world and with proper debt management you might find that debt consolidation isn’t always necessary. First, identify the spending habits that got you in to bad credit and reduce them as much as possible. Finding a second job will increase your income and over the period of time will eventually make your bad credit disappear, hopefully without taking a debt consolidation loan.

The benefits of bad credit debt consolidation

If you own a home and you are looking for an easier solution consider applying for a bad credit debt consolidation loan. You can get a home equity loan, consolidate your debt and improve your bad credit history. If you don’t own a property debt consolidation can also be achieved by qualifying for a personal loan or bad credit credit card.

Bad credit debt consolidation rates and fees

Before signing the dotted line get and compare as many bad credit debt consolidation quotes as possible. By applying for a home equity loan you will get the best rates. Personal loans, in most cases, offer lower rates than bad credit credit cards and an alternative debt consolidation option. Keep an eye out for suspicious offers such as no fees or extremely low interest rates. Compare the APR, which includes both fees and interest rates.

7 Strategies That Will Help You Reduce Credit Card Debt

This article is intended to help anyone who has a debt problem and really wants to improve his/her credit rating or financial status. If you don’t think you are strong enough then reading on is a waste of your time right???

  • 1. Identify your debt problem

    It’s important you find the main problem that created your credit card debt. Try to cut that specific payment by at least 20%. If you don’t, your credit card debt will only worsen and in the future eliminating your credit card debt will be harder to achieve.

  • 2. Create a Budget and Goal

    Remember that the first thing that got you in debt was incorrect money management. You have to set a budget for yourself and work with it. Write down your personal goal, how much you’re allowed to spend monthly and in what period of time you will reach your goal. The most important thing with this strategy is reading it twice a day to yourself and sticking to your plan.

  • 3. Contact a debt management organization

    A lot of debt management services will give you free advice and may even help you manage your payments. You can find some non profitable organizations on our debt management service page.

  • 4. Control your spending habits

    reduce credit card debt

    This is not easy however, very efficient. Don’t use your credit card so often. Try to use cash and reduce your expenses. Don’t eat at expensive restaurants, use coupons to purchase food and in general buy only what you really need. This way of life doesn’t have to last forever I believe that in 2 months time you will see a big difference.

  • 5. Apply for a debt consolidation loan

    If you are in a large amount of debt consider consolidating your debt. A good way to start is by getting a personal loan. If you have an asset such like a home get a secured loan like a Guaranteed lowest cost Home Equity Loan.
    . Using this strategy you can consolidate your debt immediately and then just pay of the loan in time.

  • 6. Get a Lower APR credit card

    Lower APR cards allow you to transfer multiple card balances into one and eliminate the numerous monthly repayments you have been facing. Again, this is not free extra money. Compare all the transfer options available and understand all the terms and conditions. Failing everything, speak to your creditors and negotiate lower interest rates and payments.

  • 7. Pay More Than The Minimum Payment

    Creditors make their fortune thanks to the interest you pay. Therefore, the best solution is to pay more than the minimum payment this will reduce your credit card debt and you will also be paying less in the long run since your interest payments will be lower. If you have trouble paying more than the minimum monthly payment, find a second job.

At the end of the day the most important thing to remember is changing your way of life and spending habits. Following these easy steps will guarantee you a debt free status within 2 – 6 months depending on the amount of debt you are in. It maybe not the easiest thing to do but, think of the results at the end and the way you will feel.

The Consequences a Debt Consolidation Loan Carries

More than just merging multiple payments into one sum, a debt consolidation loan will help improve credit ratings and if managed correctly – help regain credibility. There are many factors to look at when deciding to consolidate debt, obviously, not finding you rapidly building debt and avoiding bankruptcy.

Applying Only For the Amount You Need

When applying for the debt consolidation loan think about all the payments you have to pay off and that’s it. In essence you can apply for more than you need but it is recommended you do not. For example, if you’ve calculated and found you should pay $50,000 but want to apply for $55,000 because you want to buy a car, that may not be the best thing to do.

When obtaining a debt consolidation loan take into consideration that you pay an Annual Percentage Rate (APR) meaning, the interest you pay for is based on the whole amount you apply for. If you are in debt then obviously, you are behind payments and you don’t need to put yourself in a situation where you need to pay unnecessary interest rates.

Watch Your Credit Score Boost

The credit score you are rated is based on your ability to make payments on time. The more default or late payments you make, the lower your credit score will be. When you’ve paid off the debt you owe, with the consolidation loan and manage to make future payments on time, your credit score will boost. A higher credit score will help you get low rates when applying for loans or credit cards in times needed.