Consolidating Your Credit Card Debt

Having a debt management plan can help you pay off your debts quickly and save thousands of dollars in interest payments. Consolidating your debts can help you in the management of your debt.

Forget about turning to someone else to help you consolidate your debt. You don't have to pay money to find consolidation. You have the ability to consolidate your debt on your own.

The key to successfully consolidating your debt isn't found in getting the lowest rate loan. It isn't even in paying as much as you can towards your debt. The secret is that you can't take on any more debt. You must promise to stop acquiring new debt until you have paid off every cent of the old. Put every single card in a safe deposit box at the bank. This gets them out of sight and out of mind. You have to actually take time from your day to go get them. By the time you have a chance, often the shopping impulse is gone.

List all of the debts you have. Include the creditor's name, the principal amount currently owed, the minimum payment, the interest rate, the contact information and the website address. This is your master debt list. It will help you in organizing and managing your debt.

Start by calling each of your current credit card companies. Ask about the current balance transfer options and about lowering your interest rate. Tell them that you will move your balance to another bank if a better card offer comes along.

Take notes for each offer. Make sure that you ask if there are any balance transfer fees, how long the featured low rate period lasts, what happens if you make a late payment and about any other conditions of the balance transfer.

Be aware that many cards offer a low rate for balance transfers as long as you charge a certain amount to your card each month. This amount will have a higher interest rate. Most companies apply your payment to your lowest-rate balance first, so the higher interest will accrue more while you pay off the balance transfer principal.

You may even need to consider taking out a new card to consolidate your balances to. Simply go with the best offer you can find.

Choose the card with the best offer. Then transfer all you can to the card. If there isn't enough room, ask for a credit limit increase or spread the balance between two low-rate cards.

Make sure that you know exactly how much time you have on your low-rate introductory periods. You should plan to have as much of your balances paid off by then.

For credit score reasons, I suggest that you don't close your old accounts. Leave them open, but do not use them. Put the cards in your safe deposit box or even cut them up. Just make sure that you routinely check on the accounts to make sure that you haven't been a victim of identity fraud. If you aren't able to control your spending, go ahead and close those accounts. Not charging any new debt is more important right now than the impact to your credit score.

Work to get your debt paid off as quickly as possible. That means that you have to pay much more than the minimum payment amount. Pay as much as you can, even if it means you have to cut your spending or take on an extra job for a while.

By consolidating your debt on your own, you save money and speed up your debt repayment. Actively managing your debt is a wise financial move.

Martin Lukac http://www.MartinLukac.com, represents http://www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

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