Consolidating Credit Card Debt 4 Options For Getting Out Of Debt

Have you thought about consolidating your credit card debt?  If those high interest rates on cards are killing you, this may be an option.  When you consolidate credit card debt, you get one lower payment per month.

There are four easy ways to go about consolidating credit card debt.

1. Get a home equity loan.  A home equity loan is a second, third, or even fourth against the value of your home.  You pay off all of your credit cards and secondary debt and make one payment to the lender.  There are a number of advantages to a home equity loan when consolidating credit card debt.  For one thing, home equity loans have the lowest interest rate you can find.  Another reason is that if you have equity in your home, they are fairly easy to get.  But, be forewarned that if you can´t pay the debt in full each month, you could risk placing your entire home in danger of foreclosure.

2. Get a personal, or signature loan.  A debt consolidation loan is frequently available from your bank or from a lender affiliated with debt consolidation quotes that you can get for free.  Again, you will pay off all of your high interest smaller loans and make one payment to the lender.  While the debt consolidation loan will have a lower interest rate than your high interest credit cards, it will not be as low as a home equity loan.  This is caused for  having no assets backing up the loan.  You can also discharge a personal loan in bankruptcy, something you can’t do with a home equity loan.

3. Get a credit card with a large balance.  If you have several small credit card bills, you can sometimes get one low interest credit card and transfer all of the other balances to it.  Be sure that you get rid of all of the small cards or you may be tempted to use them and then have twice as much debt.  If you have a decent credit report, you may be able to get a credit card with a large credit limit.  But, make sure that the new card has a lower interest rate than all of the small cards because that is the whole point of consolidating credit card debt.

4. If you can´t consolidate credit card debt by working with lenders or credit card companies directly, go to a debt consolidation firm.  These firms work with the credit card companies themselves.  Frequently, they are able to negotiate lower interest rates or even get the principle reduced.  Then, instead of paying multiple bills each month, you will make one payment to the debt consolidation company.  Keep in mind that there are for profit and not for profit debt consolidation companies.  Some of the for profit companies have turned out to be very nasty.  So, do your due diligence before signing up.

We all have many options for consolidating credit card debt.  Choose the one that gives you the best combination of lowest payments per month and lowest overall interest payments over the life of the loan.
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Marcilio David M.D. is a Cardiologist and Internet Entrepreneur. Get a
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which is the best credit card to get with fair credit?

i need to acquire a credit card or two fast. which one/s should i apply for?

Answer
Selecting a credit card is not easy. Featured below are pros and cons of several of the major types of credit card offers. This information will assist you in selecting a card that is most specific for your needs.

Reward Credit Cards

Pros - These credit cards have many different types of perks associated with them when they are used for making purchases. Some of the most typical types of rewards offered are cash, airline miles, gas rebates, and/or points that can be used for discounts and savings at participating restaurants and stores. A reward credit card is one of the best choices you have if you anticipate paying your bill in full every month.

Cons - You should always read the terms and conditions of reward cards carefully before you commit to any offer. These card types typically have higher interest rates and costly annual fees. Carrying a balance every month is likely going to result in you paying more in interest fees than you are being rewarded.

Pre-Paid Credit Cards

Pros - These cards can be used in the same manner as regular credit cards. However, your are required to 'load' money onto your card when you want to use them instead of taking advantage of the revolving credit lines normal credit cards offer. You are able to spend as much money as you have on your card. Achieving approval is very simple for prepaid credit cards, even for those with the worst credit histories or those with no credit.

Cons - Your payment history is likely not going to be reported to any of three major credit reporting agencies. Therefore, this type of credit card offers no real benefit for building or rebuilding credit. There are also many different times when you can not use a prepaid credit card for purchases, i.e. hotels, airline tickets and car rentals.

Secured Credit Cards

Pros - A secured credit card is probably the best credit card type for establishing or reestablishing credit. These credit cards offer the same type of functionality as regular credit cards.

Cons - You will need to leave a security deposit when looking to apply for a secured credit card. These deposits are usually between $150-300. The annual fees and interest rates associated with secured cards are higher than normal credit cards. In fact, interest rates can be as high as 30%! Typical annual fees range between $50-100.

Business Credit Cards

Pros - These types of credit cards are great if you are looking to give your business spending power, while building its credit worthiness.

Cons - Most credit card companies will require that your business be in operation for at least two years before credit is issued. It is important to note that you will likely be able to achieve approval by obtaining a letter of reference from your bank supporting your company's positive account history.

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