Consolidating credit card debts is when you combine multiple credit card balances into one monthly payment which ideally has a much lower interest than what you are presently paying. But consolidating debts takes a long time, and many of these methods require an application process to see whether you are approved first, which usually results in a hard credit inquiry that might reduce your credit scores. There are a few ways to decide if credit card consolidation is right for you and they are as follows:
- Working with a credit counseling organization – This service can review your financial situation and work accordingly to create a plan for you to control your financial challenges. They give you advice about credit issues, budgeting, money management, and debt management.
- Apply for a personal loan -A personal loan can be used to consolidate debts and the funds from a debt consolidation loan can be used to pay off your credit card balances. This way, instead of making multiple credit card payments every month, you only have to make one payment for your personal loan.
- Use a balance transfer credit card: A balance transfer lets you move balances from one or more credit card accounts to a different card. Balance transfer credit cards usually offer an introductory 0% APR on balances that you transfer in a particular phase of time.
Asking a friend or family member for help
Depending on the amount of money that you owe and your financial picture, it might make sense to ask someone from your family or a friend to lend you money. But if you opt for this method, then you need to make sure that the loan terms and conditions are clearly outlined.
Cash Out Auto Refinance:
Some lenders offer cash-out refinance auto loans and it is one of the best credit cards to consolidate debt. This allows you to use the equity in your car to issue a loan for other expenses like consolidating credit card debts. But, if become unable to make your payments, then you run the risk of losing your vehicle.Now, if you take assistance from the home equity loans then it can turn into an excellent option as these loans possess a lower rate compared to a credit card loan or personal loans. But, here you run the risk of losing your home if you become unable to pay the loan.