By: Rodney Grid
In the United States, the number of people in credit card debt is increasing every year. So much so that it has already became the number 1 financial problem for Americans. This trend is set to become even worse in the future, as Americans tend to be consumptive. If you fall victim to the credit card debt trap, have you consolidated your credit card debt yet?
A lot of people are voluntarily forced to consolidate credit card debt because of their bad financial decisions. It is generally a good idea to consolidate credit card debt when you have several credit card bills to pay every month. Credit card debt consolidation is especially helpful when the outstanding balance of one credit card is lesser than the minimum payment of the other and will be used mainly to free up some funds in your monthly budget.
By consolidating your credit cards, you only have to remember to pay one credit card bill each month. This would save you a lot of time and hassle. In addition, the average interest rate on your credit card debt becomes lower.
Although credit card card consolidation organizations allow you to pay less every month, they will bill you a 10% fee from the amount that you owe them. What this means is that it will take you a longer time to pay off your debt when you consolidate them.
What most people do when they consolidate their credit card debt is they transfer the balance of all their cards onto their lowest-interest credit card. So if you have 10 credit cards, you would choose one with the lowest interest rate and transfer all the other 9 cards' balances to this one card. Although this is considered to be a wise move, you must remember that doing this will temporarily lower your credit score. Why? Because the closer you get to your credit card's limit, the bigger the risk you are. However, if you consistently pay and reduce the outstanding balance each and every month, your credit score will definitely be on the rise again.
Most of the time when people pay their credit card debts, they only pay the minimum amount. Over a long time, their debts take a snowball effect because of the high financial charges on their cards. When this happens, they face serious financial problems.
Spend your money wisely. It is very easy to fall into credit card debt by constantly spending on unnecessary things like lavish vacations, buying unnecessary gadgets, dining out at expensive restaurants and cafes, etc.
Always strive to maintain a great relationship with your credit card company. To do this, you need to pay your bills on time every time. If you are late in paying them, your credit score will fall dramatically and you will be charged with late fees and finance charges. Heed my advice and don't do it.
Article Source: http://www.articlesnatch.com
About the Author:Dreaming Of That Completely Debt-Free Life? Rodney Grid Is A Debt-Free Specialist Who Can Assist You Achieve Exactly That! Get His Free No-Cost Package On Consolidate Credit Card Debt And Living A Completely Debt-Free Life
No comments:
Post a Comment