Thinking about credit card consolidation? Not sure what to do about your rising credit card debt and struggling to keep up with minimum payments to various lenders? There are a lot of good reasons that answer the question why consider online credit card consolidation. Hopefully, understanding a few of the benefits may make you feel more comfortable about consolidation.
Unlike settlement and bankruptcy options, credit card consolidation will not hurt your credit score if handled appropriately so most financial advisors will suggest it over other options. To figure out if this is the right choice for you, let’s take a closer look at what credit card consolidation is and whom it helps.
What is Credit Card Consolidation?
Credit card consolidation is the practice of taking the debt of several credit cards and placing it into one loan that has a lower interest rate. Most people choose to obtain a personal loan that has a low APR and set repayment terms, which make it easier to stay on track with your monthly payments.
Credit card companies purposefully offer low minimum payments and high-interest rates because they know most people will pay the minimum when they can. However, in the end, this means you will never pay off your debt and will pay them thousands in interest.
Bills – Online credit card consolidation is one way to avoid that trap.
Benefits of Credit Card Consolidation
As noted above, one of the major benefits of credit card consolidation is that you create a set repayment plan at an affordable interest rate. Another advantage is that you open up credit on your credit cards which will help you improve your credit utilization ratio. The downside is that in order for credit card consolidation to work effectively, most applicants need to have a good or excellent credit score.
Credit card consolidation will only benefit you if the interest rate is dramatically lower than what your credit cards offer, and you will only get offered a good APR if you have good credit. So borrowers in trouble with their credit may have a harder time managing their debt.
The good news is there are a few things you can do if your credit needs help. First of all, you can look for mistakes on your credit report that you can report and hopefully boost your score. You can also attempt to start making all payments on time to strengthen your payment history and boost your scores.
Finally, if you desperately need help and can’t wait to repair your credit score because it is your credit card debt that is causing you to struggle, you can ask a family member with excellent credit to co-sign a personal loan with you or add on their credit card as an authorized user to build your credit. Before applying for debt consolidation, you should learn about the difference between credit repair vs debt consolidation.
Why Go Online?
The key benefit of looking online for a credit card consolidation program is you’re freed of all of the shopping around. In most cases, one application gets you considered by a number of different lenders, which saves you a lot of legwork. It also means you won’t have a lot of inquiries on your credit report which can drag down your credit score.
Take Action To Combat Your Credit Card Debt Today
At this point, it should be clear why you should consider online credit card consolidation. His approach is undoubtedly one of the best ways to tackle credit card debt and get out from underneath a high APR that is draining your finances. If you have credit card debt that is stressing you out, look into how credit card consolidation can help you today.