debt consolidation

The Best Credit Card Debt Consolidation Options

Does your stream of credit card bills resemble a disordered list of numbers competing to diminish your monthly budget? If so, it’s time to consider your best credit card debt consolidation strategy. The aim of doing so is simple; you want to unify all your outstanding debts into one single monthly payment at a lower interest fee to make them easier to pay off.

The goal is to have you pay less and be debt-free sooner.

Trying to determine your best credit card debt consolidation options can be a headache in itself, so let’s break it down to basics.

debt consolidation

What And Why Of Credit Card Debt Consolidation

Over time you may have accrued several credit cards from different providers, each with its own interest fees and terms, and if you’re reading this, each likely with its own outstanding balance. Credit card debt consolidation is the process of gathering multiple credit card balances and centralizing them into one single monthly payment.

As each credit card debt carries an interest charge with it, the goal of credit card debt consolidation is to lessen or extinguish the interest paid each month. In short, you’re looking to combine your various debt balances into one single monthly payment that has a lower interest rate than what you’re currently paying. In this manner you will pay less over time and be out of debt sooner.

Still reading?

Here are your best options.

Balance transfer credit card: This first option secures all your debt into one place by transferring your existing balances to a balance transfer credit card. Balance transfer credit cards typically include a promotional period during which they offer an introductory 0% APR on transferred balances.

If you able to pay off your outstanding balance during this promotional period, you could avoid any interest payments entirely. If you require longer to repay your debt you will begin to pay monthly interest charges at the card’s regular rate. Some cards charge a balance transfer fee and penalize any late payments by cancelling the 0% APR introductory offer.

Debt consolidation loan: With this option, you take out an unsecured personal loan at a favorable interest rate and pay off your credit card balances using the loan. If you have a good credit score you will be able to research and compare the best credit card debt consolidation loans to identify your optimal choice. The key is to find a loan that has a low APR, low fees, and affordable monthly repayment terms for you. There is also an option for homeowners to borrow against the equity of their home however this secured loan option is less safe.

Debt management program: This option involves engaging with a credit counseling agency. A credit counselor will assess your debt, credit and budget circumstances. If you are not able to employ a DIY approach to furnishing your debts, you will enroll in a debt management program. A debt management program is often suitable if you don’t qualify for either of the above options or if your debt balance overwhelms your ability to repay.

Optimizing Your Debt Relief

The best option for you is likely the one that reduces your monthly payments the most and has you debt-free and sooner. For those of you with a good to pristine credit rating, considering either a credit card with a balance transfer or a debt consolidation loan may offer the most cost-effective solution.

As with the purchase of any financial product, contacting a certified credit counselor for advice may be your wisest choice. Hopefully by employing one of the above strategies you can reduce the flow of credit card debt to a trickle and finally drain the debt altogether.

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