Top Tips for Consolidating Your Credit Card Debt

Taking out credit cards can certainly be tempting if you’re in need of some extra disposable cash, and in some cases, it can even be necessary to have a credit card in a world that’s becoming increasingly more expensive to live in. Having one or two credit cards available can certainly take some of the pressure off if you are strapped for cash or find yourself in a financial emergency, but if you’ve begun to feel weighed down under the responsibility of multiple credit card repayments, it’s time to start thinking about the alternative options for paying them off and relieving yourself of the stress. Debt consolidation is a great option as it allows you to put all of your credit card balances into one single monthly repayment, boosting your credit scores and freeing up your credit cards for the future, too. Here are some top tips to keep in mind if you want to consolidate your credit card debts.

Tip #1. Check Your Credit Score:

Before you look into the option of borrowing more money to consolidate your credit card debt with, it’s a wise idea to thoroughly check your credit score, to look for any errors and figure out if anything needs to be improved before going forward. Bear in mind that if you have missed any credit card payments, this will affect your credit score and may hinder your ability to take out a consolidation loan. Some credit reference agencies offer tools that allow you to check your eligibility for certain lines of credit before you apply, without having any negative effects on your score. This is a great idea as it allows you to determine which products are worth applying for.

Tip #2. Research Your Options:

When it comes to consolidating credit card debt, there are several different options that may be available to you. This will depend on a number of factors, including the amount of credit card debt that you owe, your credit score, and the amount that you are able to budget for repaying your consolidation loan each month. If you have a small amount of debt over multiple credit cards, taking out an extra credit card with a larger limit, so that you can transfer the balance over, may be an option. On the other hand, a loan is usually a better alternative if you have a high amount of credit card debt. If you would rather pay it off quickly over a shorter amount of time, a short-term online loan may help. There’s more information on short-term loans on this website.

Tip #3. Do the Math:

Whilst debt consolidation is a great way to better manage your credit lines and eliminate the worry that comes with having multiple repayments each month, it’s certainly not a free or easy way out of credit card debt. Before you start, it’s a good idea to weigh up your options and make sure that you’re actually going to be benefitting financially. Work out how much you are paying towards your credit cards as a minimum each month, and make sure that taking out a consolidation loan will be a cheaper alternative for you. Bear in mind that the shorter the loan term, the higher your monthly repayment will be – but this may well work out cheaper for you in the long run.

Tip #4. Plan for Financial Management:

Once you’ve determined the best way to consolidate your loans and ensured that it’s actually financially worth it for yourself, it’s time to make sure that this all fits nicely into your budget. And, since you’ve seen just how stressful credit card debt can become, now’s a good time to put plans in place to ensure that you don’t have to deal with it again. Come up with a plan that will help you better manage your money, whether it’s working with a bank account that allows you to dedicate money to priority bills and repaying your consolidation loan, to putting away regular savings so that you can use them before turning to your credit cards. The most important thing is to make sure that you are easily able to budget for making your credit card consolidation loan repayment easily each month as falling behind will have disastrous consequences for your credit score.

Tip #5. Commit Yourself:

Getting into credit card debt is easy but paying it all off at a rate that you are happy with, whilst successfully managing not to get into any more debt or financial borrowing in the process is hard. So, it’s important to be fully aware of exactly what you are committing to and dedicate yourself to following through with the plan. Make sure that you conduct ample research on lenders beforehand, and have your budget well planned out so that you don’t run into unexpected difficulties in the future.

Tip #6. Get Help:

Last but not least, it may be more difficult for you to get a consolidation loan through the regular channels if you have a history of missed or late payments with your credit cards, or other factors leading to a lower credit score. If this is the case, then it may be necessary for you to ask for help with consolidating your debts. Bear in mind that it is still possible to do so, although it will not be as easy for somebody with a poor credit rating. A guarantor loan is a good option if you are in this situation. You will need to find somebody who trusts you, and who has a good credit rating to guarantee the loan for you and agree to make repayments if you cannot. Another option would be to speak to a financial charity or debt help organization who can help you come up with the most likely options for consolidating your credit.

Dealing with several credit cards can quickly become overwhelming, and consolidation into one loan can make everything easier to deal with. If you found these tips helpful, we’d love to hear from you in the comments.