Consolidate Your Debt
Consolidating your debt will allow you to combine a few higher-interest balances into just one with a lower rate. So you can pay off what you owe much faster without having to increase your payment amounts. Here are two of the most common ways of consolidating debt:
- Transfer balances: Benefit from a low balance transfer rate to move your debt off the high-interest cards you have. But be aware that balance transfer fees are usually 3% to 5%. Although, the savings from the lower interest rate can frequently be more significant than the transfer fee. So always factor that in when assessing this option.
- Tap into your home equity: If you happen to have equity in your home, you might be able to use it to pay off your credit card debt. A home equity line of credit might offer a lower rate than what your credit card companies charge. With this option, though, you should know that closing costs usually apply as well.
If you do choose to consolidate, bear in mind that it’s essential to keep your spending at a minimum to avoid racking up new debt on top of your consolidated one.
