Unfortunately the only way to reduce a credit card balance is to make more than the minimum monthly repayments each month. With most of us feeling the pinch, this seems like a mammoth task. Simply paying the minimum amount off each month is posing a problem for many and often this minimum payment only covers the interest barely making a dent in the debt.
If, like many, you have found yourself with multiple credit cards and a number of large bills to pay each month, consolidating your credit card debt could be a good idea. A credit card consolidation programme is one where you combine a number of credit card debts into one single, monthly payment, with the idea of making this one debt easier to manage than a number of smaller debts.
Before deciding if credit card consolidation is right for you it is important to consider the advantages and disadvantages. Let’s start with the advantages. The main advantage of consolidating your credit card debt is that it makes managing your monthly payments a lot easier to keep track of. This could have further benefits as it could help you make a simpler and more manageable monthly household budget. Another advantage to consider is that consolidating your credit card debts can actually, believe it or not, reduce your monthly bill and save you money over time. If used correctly, consolidated credit cards may even allow you to reduce your debt quicker.
Pay as little as 0%
In addition you might be able to find yourself a deal which reduces the interest you pay, with some deals offering consolidated credit cards with interest rates as low as 0%. These offers might only be for an initial period or as an introductory offer, but if utilised effectively this can have a big impact on your overall debt.
Now consider some of the possible disadvantages. If you decide you would like some extra cash each month and you decide to reduce your monthly payments to free up some cash, you could end up paying off your debts over a longer period of time, also meaning your total debt will actually go up. Another disadvantage to consider is that taking this easy route out of debt could lead to continued bad spending and borrowing habits. Without the right commitment you could end up paying off more money and taking longer to do it, which could lead to an even worse financial position in the future.
If you think you have serious debt problems, you should consider seeking the advice of a debt consolidator or having a look on comparison websites such as USwitch to find the best deal out there for you.
Overall, if you are careful and sensible with your finances and budgeting and are aware of the potential pitfalls, credit card consolidation can be a practical step towards getting out of debt.