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Consolidating Credit Card Debts
More and more often these days, we help clients with credit card debt. The most common way of solving credit card debt without paying it off is with a debt consolidation loan.
Credit cards are great if they are used appropriately. They offer convenience and benefits such as reward points and free insurance. The problems we see most often is when clients have unbalanced credit cards with no clear exit strategy. No plan to eliminate the debt. See below some common examples of credit card debt that really should to be consolidated if possible.
Primary Purpose of Credit Cards: (Intended)
- To be used as accessible funding for emergency purposes.
- Streamlining payments. The credit card is used manage outgoings on a month to month basis and the full balance paid out each month. This includes direct debit payments for utilities.
Exit Strategy for Eliminating Credit Card Debt (Best Case)
- Escalate repayments of credit card debt up above the minimum required. This can enable paying the card off within a 6 month period for example.
- Consolidate credit card debt into a lower interest loan with a set term to reduce the balance to zero. This could be a personal loan over one to five years.
- Credit Card Debt Consolidation using your Home Loan
Example of credit card debt that needs consolidation
- Credit card balances are consistently above the card limit.
- You can see you will be missing payments in the near future.
- Your credit balances are increasing even if you are making payments.
- You are using credit cards to top up your monthly budget.
- Your account has been referred to the lenders collection department.
If you can see any of the above circumstances occurring with your credit accounts, please make contact to discuss it with us at the earliest opportunity. We can organise a debt consolidation home loan for you that can relieve the stress of ongoing credit card debts. Taking action earlier often produces better results. Fast action can sometimes secure lower interest rates, and also assists in protecting your credit score.