Consolidate credit cards

Wouldn’t we all like to make repaying credit card debts a little simpler? When you’ve got more than one debt, keeping track of them all can get confusing.

That’s why many people choose to consolidate their debts every year. By combining multiple debts into one, the hassle of keeping track of and repaying those debts can be reduced.

Not only that, but when it comes to consolidating credit cards, it’s often possible to save money. Credit cards often carry a higher interest rate than other types of credit, but consolidating those debts with a lower-interest loan can sometimes significantly reduce the amount of debt paid in the long run.

Debt consolidation can also give your repayments a bit more structure, which can be useful if you have trouble staying disciplined with your repayments. We’ll elaborate on this further shortly.

This article has some more useful information on how debt consolidation can help.

Types of debt consolidation

Here are two of the most common ways to consolidate credit card debts (and possibly other types of debt, as long as you can borrow enough to cover it).

Debt consolidation loan

Quite simply, this is a new loan taken out to pay off existing debts. When people find themselves in financial difficulties, the first thing that they often do when trying to resolve these problems is to search on the internet for a private loan consolidation company. You really don’t need to find any sort of debt consolidation counseling assistance, you can just do this yourself. Here’s how: You borrow enough to cover the debts you want to include (plus any associated charges, such as early redemption fees), and then start repaying the new loan.

One advantage of consolidating credit card debts into a loan is structure. Credit cards are sometimes described as ‘revolving credit’ – credit that doesn’t require any set repayments (apart from a small minimum payment). For some people, it can be hard to maintain the discipline required to repay this kind of debt at any decent rate. But because a personal loan requires strict monthly payments, paying less is not an option, so you’ll know you’re making an impact on your debt every month.

0% balance transfer credit card

You may be wondering: why would I pay off credit card debts with another credit card? But a 0% balance transfer credit card is no ordinary card. It allows you to pay off existing debts and then repay the new debt without paying interest, saving you money.

The 0% interest period is limited, though – typically between 12 and 16 months. You’ll have to repay the balance in full before this time expires to avoid paying any interest.

So although a 0% balance transfer credit card retains some flexibility in terms of repayments, you’ll have to repay what you owe in the interest-free period if you want to get the most from this kind of deal.

So remember, you don’t need to look for private loan consolidation services, avoid searching for debt consolidation counseling and consolidate credit cards into one easily manageable debt on your own.