Consolidating credit card debt resources arianny dating anyone
Here are points to consider before seeking a consolidation loan.
Lower, fixed interest rates and an extended repayment period are the big pluses.
The card user can transfer debt from other high-interest cards to the new one.
Most no-interest balance transfer offers are limited to 12-18 months.
Credit cards are unsecured debt, and you are better off consolidating that debt with an unsecured, or personal, loan.
But if you apply for an unsecured loan from a bank, credit union or online lender, you should ask about origination fees, an up-front amount lenders charge to process your loan.
Since credit card interest is imposed on the current unpaid balance every month, payments can be high, especially at interest rates that often exceed 20% or 25%.
Annual interest rate on a home equity loan can be significantly lower, often in the 5%-8% range, and each month you repay both principal and interest until the loan is repaid.
Consolidation and refinancing are two of the most common ways to reduce credit card debt.
But if you pay no interest for a year, you could focus on paying down the principal and avoid interest payments in the future.
If you can’t get a 0% interest promotion, consider transferring your balances to the card you currently have that charges the least interest.
Sometimes one of the cards you now use will offer interest free periods on balance transfers as a promotion.
If that isn’t available, shop around for a card that offers a no-interest introductory rate as an incentive.