Credit Card Consolidation Debt Must Be Done Correctly |

While the consolidation of credit card debt can be a wise move financially, it is important to do it correctly with a clear understanding of whether it will truly benefit someone or get them deeper in debt. Care must be taken to check the various rates of interest on each of the credit cards because the intention is to get a lower rate and a lower payment after the process of consolidation. There are some key steps to take to ensure that such debt consolidation will work for your financial situation.

Start by Assessing Your Current Credit Card Debt: To ensure that debt consolidation is a good financial move for you, collect your credit card statements and do a bit of homework. Add all of your outstanding credit balances to get a total of combined credit card debt. Next, calculate how much you would pay each month for all of the cards if all you did was pay the required monthly minimum (hopefully, you’re not just paying the minimum on each card). This will permit ease of comparison.

Check What Various Companies Offer for Card Consolidation: Many card companies clamor for your business via countless advertisements that tout the benefits of debt consolidation. Doing more homework can help in determining whether selected companies are legitimate or if they appear on a scam list or a complaint list such as those listed with the Better Business Bureau. However, their offers are what will help you to check what they have to offer with respect to interest rates and various terms of their card agreements.

Compare Your Current Credit Cards To Favorable Offers: If the credit card being offered bears higher interest rates over time (beyond a short term introductory rate), or if the minimum required payment is higher than what you make on all your other cards combined, it may not be the best choice. Here is where you need to be smart and determine whether the consolidation of several cards into one will save you money. Some people don’t save much in monthly payments, but decide to have one payment as opposed to several due to the convenience factor.

Make A Decision That Includes Making Your Payments: Credit is extended by a lender based upon trust that the money provided will be repaid according to the terms of the agreement. When you are late or don’t make payments, your credit record will suffer and your score will decline. It is hard to repair a damaged credit rating because it is hard to rebuild trust. Determine to make the regular monthly payments.