Credit Card Consolidation: Why Bother With The Hassle?
Sometimes people who are thinking about credit card consolidation wonder if it’s worth the hassle. They think, “I have a lot of debt, but I’m not behind on my bills so why should I bother consolidating my debt?” It definitely IS worth doing, and there are three big reasons why you should consider doing it.
Save Money
The number one, absolute best reason to consolidate your debt is because you will save money. Add up all of the balances of your revolving credit accounts, including charge cards, gas cards, and department store accounts. Now write down the interest rate that you are paying on each of those account and figure out the average interest rate on the total of your revolving credit. In most cases, the credit card consolidation companies can give you a much lower rate than whatever your average interest rate is right now.
Pay Off Your Debt Faster
The second best reason to consider consolidating your debt is that you will be able to pay off your total balance a lot faster. As we talked about earlier, you will be saving money on your interest rate. If you take that money that you are saving and use it to pay down your balance you will pay off the total a lot faster, which will save you even more money.
And Most Importantly…
The third reason is probably the most important one, but not for the obvious reason. When you consolidation your debt you will only have one payment to make on your revolving accounts each month. This has three enormous benefits:
- It’s more convenient
- You are less likely to forget a payment and have to pay late fees and interest
- By avoiding late fees you also maintain your good credit rating
This last point is the really important one. By making your payments on time, you not only avoid interest and late fees, you also keep a good FICO score which will allow you to get car loans, mortgages, etc, with a lower interest rate in the future.
Your next step is to do some simple research on the credit card consolidation companies. Take advantage of any free consultations and see if they are able to offer you a lower interest rate than the one that you are paying right now. If they are, accept the offer and start saving both your money and your credit rating.
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