Consolidate Debts

Once a Month...Maybe More

Maybe you pay your bills once a month. Or maybe twice a month (when you get paid). When you do, it's a hassle. First of all, you have all these credit card bills and medical bills to deal with, then your student loan payment. And that's all in addition to your rent, utilities, etc. Even if you pay your bills online, you still have to drag out your checkbook and calculator. And the stress is still there. But what would you say if we told you there's a way to cut some of those bills down? You'd probably be in favor of it if it's not a fly-by-night scheme. It's not though. It's called consolidating your debts, and we can tell you about a couple of ways to do it.

First, try it on your own. Shop around online for a credit card with a 0% introductory rate for a long period of time. Make sure there are no balance transfer fees and there's no annual fee. Then transfer your credit card balances to that card. If your credit card balances total the national average of $9,300 and your introductory 0% rate is good for a year, your minimum will be $372. (This is based on the fact that credit card companies are now making the minimum balance due 4% of the outstanding balance.) However, if you want to be diligent and pay off the entire balance during the introductory period, your payment would be $775 a month. Some people even pay the minimum until the 0% introductory period ends, then transfer the balance to another 0% card.

For some people who want to consolidate debts, this is a viable option. For others, however, this method is not feasible. Either the minimum would still be too high or the credit card companies won't give them a credit limit that high because then the consumer would be "overextended." For those people, there are other ways to consolidate debts. Namely, debt consolidation.

Debt consolidation is an excellent way to consolidate debts because there are no requirements of a lot of cash, home ownership or collateral like with other debt consolidation programs. Instead, a debt management company consolidate debts on your behalf. But they are able to get you reductions in interest rates that you can't get on your own. They may even be able to get past fees removed, taking the balance down to a more manageable amount. Then the new balances are combined, and you make one monthly payment to the debt consolidation company instead of all those monthly payments to your creditors. Choosing to consolidate debts in this manner is an excellent idea--and you can be debt free in about five years.

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