How does the concept of debt consolidation work? Especially when applied to credit cards.?
I'm trying to help aboout someone who has $ 10,000 in card debt credit spread over 6 cards, things turned around. Does anyone know the options have and what processes are best. Any help is greatly appreciated.
Debt consolidation and balance transfers are two different things. If you are looking for consolidate debt, a low-interest loan is probably more in line with what you're looking for. While you will not have the lowest rate out there, will bill a fixed amount to pay each month, and at the end of the loan, the debt will be repaid. There are some very good ones out there, just look around and weigh your options carefully. Balance transfers in brand new accounts usually have a teaser rate of 0% for about a year, then the periodic will be in April. Keep in mind that you also pay a transfer fee in most accounts, about 3% to the maximum recommended by the company for each transfer made. If the person concerned is their credit limits low on their current accounts and amounts that are being close to that line, the chances that you will be able to find a company willing to transfer the sum total is low. You are asking them to assume a balance of $ 10K with little or no interest being paid and in return will only make a small amount of the discount rate. Balance transfers have a very low cost by what issuers do not like to treat them as "consolidations" because they know they are going to have a loss in the amount, unless the person is unable to switch to another emitter after the teaser expires. If you go the route of balance transfer, also note that you will not know what limit is adopted, so that no know in advance if you are able to transfer the balance in full or not. Do not give information in advance of transfer, because it is not enough to transfer the total amount going to go ahead and transfer as much of the allowed limit, leaving more than a bill and a hit on your credit for research. With information I have here, the loan debt consoliidation sounds more like what you need. At least with that, no guessing what your payment will be, what its rate of interest can change, and you'll know when the debt is fully paid.
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