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7 Credit Consolidation Solutions to Help You Get Out of Debt

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When you’re drowning in debt, getting out of it can seem like an impossible feat. You might get discouraged when looking at the size of your debt and think that you’ll never pay it off, but the truth is that there are many credit consolidation solutions available to help you work your way out of debt and become financially stable again. These seven credit consolidation solutions can help you get out of debt so you can have the future you’ve always wanted!

1: Find Your Credit Card Interest Rate

A credit card’s annual percentage rate (APR) is a universal measure of interest rates. For example, if you have a credit card with an APR of 18 percent, then you’ll pay 18 percent on any purchases made on that card. In other words, a $1,000 balance on your credit card will cost you $180 in interest over one year if you don’t pay it off. To get out of debt as quickly as possible and avoid paying high-interest rates, look for low-interest credit cards or find another method for managing your spending habits.

Here are some effective methods for lowering your debt:
  1. Balance transfer – The best way to lower your debt is by transferring balances from higher-interest credit cards onto a low-interest card or 0% APR introductory offer. Balance transfers can be tricky, though, so make sure you understand all of the terms before signing up for anything.
  2. Negotiate with creditors – If you’re already behind on payments, consider negotiating directly with creditors to work out more manageable payment plans that can help prevent future defaults.
  3. Set up automatic payments – One easy way to ensure you always pay your bills on time is by setting up automatic payments through your bank account. You won’t even need to think about it!
  4. Pay off highest-interest debts first – It may seem counterintuitive, but many financial experts recommend paying off smaller debts first because they tend to carry higher interest rates than larger ones. This strategy allows you to tackle larger debts at a faster pace while saving money on interest charges along the way.
  5. Consider consolidating loans – When you consolidate multiple loans into one loan, you only have to make one monthly payment instead of several. However, keep in mind that consolidation loans often come with their own set of fees and penalties.
  6. Stop using credit cards entirely – Some people decide to stop using their credit cards altogether once they’ve racked up thousands of dollars in debt. Although it’s not always practical, cutting up your plastic can save you hundreds or even thousands of dollars per year by eliminating late fees and interest charges.

2: Look At Your Payment History

When you apply for a credit consolidation solution, it’s important to make sure your payment history isn’t littered with late payments or defaulted loans. Some companies will check your payment history (usually three years back) and, if it doesn’t look great, they may charge you higher interest rates or refuse to help you at all. Getting out of debt is challenging enough without paying more than you need to. Credit score optimization should be a top priority when pursuing a credit consolidation plan; learning how credit card balance transfers can be an easy way to do just that.

3: Use A Debt Calculator

Before you can decide which credit consolidation solution works best for you, it’s important to understand exactly how much debt you have, what your interest rates are, and when your payments are due. A debt calculator is a great tool for doing just that. It can help identify if you have any high-interest loans or credit cards—those are easier to tackle first. There are also free debt calculators available online. This allows users to input as much information as they want about their loans, including details on monthly payments and interest rates.

4: Make A Budget

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If you’re anything like me, you might have a hard time sticking to a budget because it usually involves things I don’t want to do. For example, figuring out how much you owe and when your next payment is due isn’t fun at all. With that said, making a budget isn’t as painful as it sounds; in fact, if done right you can learn what’s going on with your money and learn how to allocate it more effectively. A personal finance tool like Mint can help by showing all your assets in one place and giving you tips on how to spend smarter.

5: Balance Transfer Zero Percent Offers

A balance transfer zero percent offer can help you consolidate your high-interest credit card debt with a new credit card. Balance transfer zero percent offers to allow you to transfer high-interest balances from one or more credit cards onto a new card that charges 0% on balance transfers for anywhere from 12 months to 18 months. As part of your deal, if you pay off your transferred balances in full within these time frames, there are no interest charges at all. The key is not only finding a long-term balance transfer zero percent offer but also putting in some effort so that you can pay off these debts before having to start paying the interest again.

6: Consider Getting A New Card

Filing for bankruptcy won’t always be your best option, so you need to consider it a last resort. If your income is above average and you have a lot of debt, you may have better options. Whether or not filing bankruptcy is right for you, read up on what it means so that you know what’s going on and how it will affect your life before making any decisions. It’s also important to discuss bankruptcy with a financial advisor or lawyer who can give specific advice based on your unique circumstances. There are other alternatives to bankruptcy—like getting a new credit card—that could help you pay off debt more quickly.
Here are some steps to take if you want to get out of debt fast:

1) Find out if you qualify for a balance transfer credit card.

2) Compare cards and choose one with an introductory 0% APR period.

3) Pay off as much as possible during your introductory period to avoid interest charges.

4) Transfer your balances from other cards onto your new 0% APR card while paying them down at least monthly until they’re paid in full.

5) After your introductory period ends, continue using your 0% APR card to pay off your remaining balances.

6) After all debts are paid off, keep using your card but make sure you never carry a balance again!

Paying off debt quickly is a great way to make sure that your finances are under control and that you’re on track for building wealth. If it’s been years since you’ve done a budget, or if you feel like your financial situation isn’t where it should be, it’s time to make some changes. The key is recognizing that taking control of your money means taking action—so what will you do?

7: Know When To File Bankruptcy

While many people file for bankruptcy protection without a second thought, others try to avoid it at all costs. The most important thing you can do before filing for bankruptcy is to make sure you know when it’s time. Ideally, you should only file if your debts are high-interest or unsecured and if they’re preventing you from making ends meet each month. If that’s not true—if your debt isn’t high-interest or if it’s secured by collateral—you may be better off filing an unliquidated Chapter 13 bankruptcy instead. This type of petition helps lower your monthly expenses and gives you three to five years (depending on state laws) to pay back creditors in manageable installments.


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