Why credit card debt consolidation is a good thing

Carrying a large balance of credit card debt on several cards can become a vicious cycle. You spend time chipping away at the balance on your cards only to see it increase once again when you make another purchase that was equivalent or more to the minimum payment you just made.

Instead of continuing to make separate payments on these cards, consider combining them into one loan through a credit card consolidation. Here’s a few reasons why consolidation might be beneficial for you.

One payment instead of multiple ones

Different credit cards means you likely have different interest rates, different due dates and different minimum payments. Perhaps you’re good at keeping up with the various due dates and minimum payments but things can be easier. Simplifying the hassle by moving it all into one loan that you pay once per month.

One interest rate – one payment

Instead of paying different rates on different cards, a credit card consolidation will allow you to stick with one payment on a single loan. While the monthly payment will likely be higher, you’ll put yourself in a better financial situation. Just be sure you don’t run up the balance again on those paid off credit cards.

Multiple ways to do it

You don’t need to open another credit card and transfer balances to consolidate debt if you don’t want to. Among the options are personal loans, car title or lien loans and home equity lines of credit. All these options generally provide a cheaper interest rate than credit cards. In addition, they may provide more than enough funds to pay off your cards and leave you with leftover funds for other uses.

If you need professional advice on managing your debt, Travis Credit Union members have access to free financial counseling through the BALANCE Financial Fitness Program.

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