Consolidate Your Credit Cards - Lower Your Monthly Payments

Christopehr M Luck

If you're like most North American people today, you go through
life carrying a fair amount of credit card debt. And if you're
like most North American people, you're okay with that. $100 per
month in repayments is fine, even if you're paying that much on
three different cards. It's doable - you can afford it, if you
have to. But here's the thing - if you consolidate your credit
card debt, you don't have to.

Do the math with me here: You have a Mastercard, a Visa, a
Discover card and an American Express. Let's say with each of
them you're supposed to pay 12% interest per year, (which would
be generous - many cards charge as high as 29% these days!) and
the monthly minimum us roughly 2% of your balance that has to be
paid back each month. Assuming you owe $2000 on each card,
that's a $40 minimum payment on each card, or $120 per month -
before interest is even factored into your repayment equation.
But if you're paying back $40 per month on a card that you owe
$2000 on which charges 12% interest per year, you're paying $280
- or over half your repayments - in nothing more than interest!

Now consider the options when you consolidate your credit card.
First of all, you could take out a new credit card and put the
balance of all those other credit cards on it. Meaning, you take
the debt from your Visa, Mastercard, Discover and AmEx, and you
pay it all off using your new card.

Because most credit card offers will allow you to 'transfer your
balance' from another card to theirs for 0% interest, you might
not reduce your monthly minimum payment each month, but you will
reduce your interest rate significantly, thus paying your debt
off much sooner. Consolidation of credit card debt can reduce
your payments by hundreds of dollars a year!

Another way to consolidate your credit cards and lower your
amount owing, is to take out a consolidation loan with your
bank. Because credit card interest can be up to 29% (even more
in some states) without it being called 'loan sharking', many
consumers get trapped in a debt cycle that seems unending.
Payday loans are no help - they can be even worse, in fact. But
a consolidation loan with a bank can see you pay all of those
debts off at an interest rate of 5 or 6% - saving you a fortune
on your payments.

But maybe your credit rating is awful and you don't think you
can get a consolidation loan, or a credit card to consolidate
your old credit card debt - have no fear! There is a multitude
of lending institutions whose job it is to find financing for
people just like you. Granted, the interest rates will be higher
than for someone with a good credit background, but it will
still be significantly lower than what you'll pay in credit card
fees, and as you pay that loan back, your credit score will
quickly begin to heal.

There's just no good reason to carry a huge credit card burden
these days, and it's mainly out of apathy or ignorance that so
many people do. If you're in need of information to help get out
of the burden of credit card debt, there are many institutions
and debt counseling organizations that can help you get out from
under the unending pressure of debt. In fact, many of them can
negotiate a better rate with the banks and credit card companies
you own money to, to ensure that you can pay back what you owe
without living in poverty.

Credit cards are a handy tool, but the time is right for you to
consolidate your credit card loan payments and start living well
once more. 

About the author: If you would like to read more of my personal articles like the one listed above, please visit my cr edit advice blog