Debt Consolidation Using Credit Cards

Ways to Save Money By Using Credit Cards to Consolidate Debt

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If you do not own a home, cannot refinance or cannot get another mortgage on a home, then consider the following strategies in your debt management program.

The two key points to remember are:

  • The lower the interest rate you pay on your debt – the more money you will save over time.
  • The higher amount of money you pay against the debt each month – the more money you will save over time.

Debt Reduction Credit Card Consolidation

A safe debt consolidation strategy is to secure a low interest credit card and roll all of your higher-interest debt onto that card.

Your objective is to lower the overall amount of interest you pay on your debt.

Beware of Introductory Low-Interest Rate Cards: When transferring your debt to a lower-interest card, you need to be very careful that you understand all of the fine print on your new card. Many credit card companies offer "introductory interest rates" – these are ridiculously low interest rates that jump up to a high interest rate after a few months, or if you use the card for another purchase after the transfer and they may have significant fees associated with the transfer.

Pay Off Credit Card Debt with Maximum Efficiency

If you are carrying debt from multiple sources, always try to pay off your highest interest rate debt first – paying much more than the minimum payment as possible while paying just the minimum on your other obligations.

After you pay-off your highest interest debt, put all of the money you paid to that debtor toward your second highest interest rate card while continuing to pay the minimum on your other debt. Continue with this strategy until you are debt free.

You may be surprised at how quickly the debt will be paid.

Get Ideas for What to Do
About YOUR Debt...

Use the Retirement Calculator to find out: the pros and cons of paying off your debt and personalized options for how to do that...