Credit Card Debt Consolidation: Not A Difficult Task To Perform |
|
The yearly projections have been made for the amount of debt that will be incurred during this holiday season, the portion of it that will be put on credit cards and the extent of help required from a credit card debt consolidation. Perhaps the bit about the debt consolidation loan isn't really true, but one is likely to agree that a significant number of consumers will be in the need of credit card debt consolidation to tackle the massive debt they've built up. This year, the average consumer will spend will be between $700 and $900, for a total of around $220 billion in holiday spending. Nearly half that amount, or $108 billion, will go on credit cards. A considerable number of shoppers, roughly 60%, put money aside during the year to facilitate this spending spree, and therefore will avoid additional debt. The other 40% account for almost $35 billion in spending and will carry credit card debts for months, unable to pay them off by next Christmas. For that matter, around 39% of all consumers, including those seeking credit card debt consolidation help last year, are still struggling to pay off last year's holiday spending spree. Not in the least an encouraging scenario. According to experts, the typical consumer should not exceed around 1.5% of annual gross income, which works out to nearly $720 for the average household with $48,000 in annual earnings. Among major problems with credit cards is that they don't feel like real money. People are likely to spend around 30% more with a credit card than with cash. People generally tend to be more careful with money than with credit cards. There's no doubt that credit card debt consolidation is called for. Credit card debt consolidation could very well appear to be difficult, with balances on all your existing credit cards. But it needn't be so difficult. What you really require is to create a credit card debt consolidation plan like the one that follows. 1. Make minimum payments on all your cards except the one with the lowest interest rate. The logic is that you want to free up some credit on the lowest interest rate card. 2. Once you have some credit available, transfer as much balance as possible from your highest interest rate card to the lowest rate card. 3. Continue with step 1 and 2 until the entire balance on your highest interest rate card is clear. 4. Cut up your highest interest credit card and close the account unless it happens to be your last card, which means you've completed your credit card debt consolidation process. 5. Otherwise, return to step 1 again. At the end of the process, you'll be left with only a single low interest rate card. It is certain that well before you complete the credit card debt consolidation process, you'll be at the receiving end of a flood of offers for new low introductory rate cards. Pay no attention to them unless the post-introductory rate, or the real APR, is lower than your currently lowest rate card. Here, you can consider transferring the remaining balance or as much as possible, from your highest rate card to this new card and then close the highest interest rate card account. This prevents you from increasing the number of cards available for you to use. On completion of the credit card debt consolidation process, there are certain factors to look for next. It is mainly all the bad spending habits that are responsible for having too many credit cards to start with. Everything else that requires watching out for is inevitably linked to it. More than anything else, bad habits that hold us back. Learn to get rid of offers for new credit cards without even a glance. Similarly pay no heed to the countless commercials that claim you won't be able to live without the latest new invention. If you've lived without them until now, you certainly can continue doing so. |
