http://www.flickr.com/photos/qiaomengToo many credit cards can result in overspending and getting into debt over one's head. Limit the number of cards, setting a limit on each to control spending and avoid excessive debt. Keep just one or two and return the rest. Or, get rid of the high interest cards and benefit from credit card consolidation loans to lower monthly payment; keeping just one card for emergencies.
What Is Your Objective?
Your objective may be to reduce interest rates, lowering monthly payments, avoiding bankruptcy, consolidating bills for one monthly payment or merely getting out of debt at the earliest. Credit card debt consolidation is the answer to achieving these goals and saving thousands of dollars. There are three options for lowering credit card debt.
Pay Down Your Highest Interest Debts
Highest interest debts should be paid first. Don't make more credit purchases while doing this. Try to pay the maximum to your highest interest debt and not the highest balance. This helps to pay down debts at the lowest cost. When the lower initial rate is nearing increase, switch to another lower rate card if it has been offered. This is one method of credit card debt consolidation but can prove trickier requiring better knowledge of interest rates.
Use Lower Interest Rate Cards
Use low interest rate cards to reduce credit card balances systematically to escape debt. Certain situations require transferring balances from high interest cards to new credit cards offering low introductory rates, known as card surfing. Go for a lower interest rate for the opportunity to transfer balances from high interest cards. Start paying down the new consolidated balances, doubling the minimum payment on the old balances. It's vital to take advantage of the lower interest rate to pay more each month to reduce total debt. Low interest rate cards can be used as a tool to reduce credit card balances systematically to get out of debt. In certain situations it is wise to transfer balances from high interest cards to new credit cards with low introductory rates, this is known as card surfing. Apply for a lower interest rate card with an opportunity to transfer your balances from current high interest cards.
Start paying down your new consolidated balances, doubling the minimum payment you were paying on the old balances. It is crucial that you take advantage of the lower interest rate to pay more each month to reduce your total debt.
Talk to Your Own Bank
To get or retain business, banks may offer a balance transfer. This involves taking existing credit card balance to transfer to their credit card. They may often offer lower rates as incentive. However make sure the credit card from which the balance was transferred is closed out.
The interest rate needs to be less than the current one on your credit cards. But you may well succeed in negotiating an interest rate even lower if all your financial banking is in the same place that you are applying for a credit card consolidation loan from.
In conclusion, reduce the number of credit cards to one or two, change buying habits, consolidate debt to a lower interest rate and pay more, even if only a little than the minimum monthly payment to pay off the credit card faster to become debt free. Reducing the number of credit cards helps control spending and avoid excessive debt. Use lower interest rate credit cards and acquire a debt consolidation loan to pay off all debts.
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Have you made your first baby steps to freeing yourself from your credit card debt? If you haven't, read and understand the contents of Credit Card Debt Management; learn from the experts and get yourself out of your credit card debt.
