Consolidate Credit Card Debt with These 3 Strategies

It’s easy to fall into credit card debt. Especially when a difficult financial situation is paired with the high APR fees for most credit cards. Debt can seem like an impossible hurdle to overcome. However, there are several steps you can take to consolidate credit card debt.

#1- Work with a Credit Counselor

There are credit counseling companies designed to help individuals manage and consolidate credit card debt. Working with a credit professional starts with carefully examining one’s entire financial blueprint to come up with a workable plan to help clients tackle their debts. These counselors offer credit advice and help people in debt come up with budgets and debt relieving strategies.

Before agreeing to credit assistance, look through the terms a counselor requires to ensure a good fit.

#2- Choose a Balance Transfer Card

For debtors who still have decent credit, a balance transfer credit card might be worth trying. These credit card types offer a low (or 0%) APR for a set period before jumping to a standard APR. During the introductory period, individuals can transfer their credit card balance to the new card and pay it off interest-free until the low APR period is over. 

Be sure to pay the balance off before the APR jumps to the standard APR for the chosen card, as the new APRs can be quite high.

#3- Use Your Home Equity

If a debtor owns a home, tapping into the home’s equity is a smart way to pay off credit card debts. By applying for a low-interest home equity loan, a homeowner can borrow against their home’s equity. Then, they can use the funds to pay off their credit card debt and repay the loan over a period of time. Additionally, depending on the terms of the loan, the interest payments might be tax-deductible.

For home equity loans, calculate the total cost of the loan before signing an agreement. There may be significant upfront fees and steep interest costs to consider.

It’s not easy to get out of credit card debt and usually, the process takes sacrifice and diligent money-saving practices. However, with the right plan and the will to get out of debt, it’s possible to eliminate credit card debt.