How To Consolidate Credit Card Debt

Your credit card debt is getting higher and higher. And, you'll want to do something to pay it off right away. Moreover, rising interest rates usually have an impact on credit card interest over time. In a perfect world, we would all pay off credit card debt every month, maintaining a perfect credit score. But sometimes there is something unexpected that makes us have to reset all debts, one of which is credit cards. The question is "how to consolidate credit card debt?"

How To Consolidate Credit Card Debt
Consolidate Credit Card Debt (Picture:

When entangled in credit card debt, the solution you can take is to follow a refinancing program. In short, this method is the right solution because it utilizes the assets you have to get funds in paying off the remaining debt that is still in arrears.

Is Consolidating Credit Card Debt A Good Idea?

Refinancing or commonly also referred to as debt consolidation is a step taken to make it easier for you to be able to pay off a combination of several types of debt into one debt only to a financing institution other than a bank (for example multi finance or peer to peer lending companies).

In the credit card refinancing process itself, usually, the flow is the same as when you first applied for other credit installments. You just need to choose the right refinancing service provider that suits you. Also find out what requirements you need to meet, for example, whether it needs to be accompanied by a guarantee of assets (vehicle or property) or is not necessary. As well as what other provisions you need to meet to join the program to pay off the remaining debts that are still running.

Best Way To Consolidate Credit Card Debt

There are two types of debt consolidation, namely using collateral and not using collateral. Both have their advantages and disadvantages and can be obtained by the terms and conditions provided by non-bank financing institutions.

Here are two types of debt consolidation programs that are usually available and provided by organizations or financial institutions:

  • Consolidation with Collateral.
  • Unsecured Consolidation

Consolidation with Collateral

As the name implies, debt consolidation of this type is carried out using collateral. In most cases, usually, the type of asset that can be collateralized is in the form of property, especially residential houses. In other cases, you can also give the car as collateral.

To participate in the consolidation program with collateral, ongoing debts can be in arrears or smoothly. So, even if it is not yet in arrears, you can take this step as a preventive measure to be able to pay off the debt with relief while still having funds. For those who are already in arrears, practice will also help carry out the negotiation process first before the debt is consolidated. So, you can pay off debt even lighter.

Unsecured Consolidation

Of course, this type of debt consolidation is more suitable for those of you who do not have assets. There are two types of unsecured consolidation programs, namely:

  • Card Cutter.
  • Card Cutter Plus.

Card Cutter

In this type of program, you can consolidate some credit card debt. In the Card Cutter program, the condition of the debt is usually not in arrears. You do not need to use any collateral, just register yourself in the Card Cutter program, then several types of debt will be replaced into one new debt.

Card Cutter Plus

In this type of program, you can consolidate some credit card debt. The difference is, the condition of the debt is usually already in arrears, then before it is consolidated into one, the debts will go through a negotiation process first to get a cut. Of course, this will make your debt even lighter, and easier to pay off.

Steps to Apply for Debt Consolidation, including:

  1. Calculate Total Debt and See What Assets Can Be Utilized
  2. Start looking for debt consolidation service providers.
  3. See if you can meet the requirements.
  4. Request a Clear Payment Scheme.
  5. Make sure you can agree to the nominal installments per month and loan interest.

To get the best refinancing program which is certainly accompanied by a debt management program, to help you get rid of debt, you can use the services of a professional debt management company.

Hopefully, the information mentioned above about "how to consolidate credit card debt" can help you a lot to reduce the burden you face.


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