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If your credit card debt is skyrocketing out of control or you are only able to make minimum payments each month or have not been able to make any progress toward paying off the debt, you may want to consider low interest credit card consolidation. Even -- and perhaps especially -- people with poor credit can obtain lower interest rates that will allow more of your monthly payment to be applied toward paying off the balance of your debt and less thrown away on high interest rates. There are several different options available that can help.
Fixed Rate Credit Cards
Most likely, the credit cards you currently have offer adjustable rates, which means the credit card company adjusts the rate seemingly at will. During the credit crunch that occurred in early 2009, most credit card companies doubled their interest rates, which increased minimum payments and made it even more difficult to pay off credit debt. A fixed rate credit card has a guaranteed interest rate, typically for a specified period of time, that is normally offered as part of an introductory offer to entice you to apply or transfer balances.
It takes a great deal of discipline to use these offers to your advantage, but if you are serious about getting out of debt, this is one way you can help yourself. By transferring your high interest rate credit card balances to lower, fixed rate cards, more of what you pay each month goes to pay off the principal balance. For this situation to work effectively, you need to find the lowest fixed credit card rates possible. You also have to stop using the card that was paid off by the balance transfer, and set up a payment schedule that allows you to pay most or all of the balance transferred during the fixed rate period.
Credit Card Consolidation Companies
If obtaining new credit cards is not feasible, either because your credit is already stretched to the limit or you do not believe you can manage the credit effectively, you may want to consider other debt relief options. The best credit card consolidation companies offer multiple options for helping you get out of and stay out of debt. In addition to the debt relief these companies offer, you should also have access to debt counseling that can help you avoid finding yourself in the same situation in the future.
The credit counseling service you choose can help you negotiate with your credit card companies. Instead of paying a payment to each credit card, you can make one payment to the consolidation service. After making several payments on time, the company will be able to negotiate lower interest rates, sometimes half of what you had been paying.
If you are in peril of filing for bankruptcy, a loan consolidation company can help you avoid the negative credit impact by negotiating payoffs with your credit card companies in exchange for closing the cards. While this will also report negatively on your credit, it will not have the impact that bankruptcy would have.
