How Credit Debt Consolidation Can Become Complicated

Credit debt consolidation is sometimes a necessary tool that you will end up needing to use because your debt has gotten out of control. If done properly, credit card debt consolidation can be an effective tool to reduce and manage debt. Below are some tips to keep debt consolidation for credit from becoming too complicated and frustrating:

Get Organized

Before you begin to consolidate your credit, you will need to put some numbers together for a better understanding of your credit profile. You will need to review all of your credit cards and write down all of the necessary information about each card:

• Name of the creditor
• Address and Phone number of the creditor
• Your Account number
• Due date
• Minimum monthly payment
• Interest rate
• Total balance

You need to do this for every credit card you have that you need to consolidate.

Then, you will need to determine your take-home pay and add up any other form of income. Take a look at your paystubs and write down the net income.  Once you determine your monthly income, calculate your monthly living expenses. Living expenses include:

• gas,
• light,
• phone,
• cable,
• food,
• water,
• trash pick-up,
• cell phone charges,
• car notes,
• and other living expense (such as property taxes)
  
  

Then, subtract the living expense from the monthly income. This is the first number you are going to need to have handy whenever you start to consolidate your bills. If you are not receiving consistent paychecks, then you will need to add up the income that you have brought in from the past three months and divide by three. This is the number that you will use as your monthly disposable income.

Choosing Your Card

If there are several different interest rates for your cards then you should begin to consolidate all of the debt into one card. To prevent credit card consolidation from getting too complicated, you should be sure that you are picking the right card for the job. You will want to pick the card that has the lowest interest rate. If you have a lot of debt, you are going to want to choose a credit card that not only has low interest but a high credit limit as well. Once you have found the right card for the job, you can move all of your other credit debt to that one card. After you have done this you will only have to worry about paying off one card instead of several.

Debt Consolidation Services

There are plenty of these types of places online. It’s best to get one that is not going to charge you any money. Consolidation credit counseling can offer you assistance and guidance in getting you out of debt as easily and quickly as possible. If you want to consolidate credit debt, know it can be fixed easily and effectively with a little help and organization.