3 Ways to Consolidation Credit Card Debt - Tuck Associates

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Debt consolidation is a strategy that allows you to roll multiple old debts into a single new one. Ideally, that new debt will have a much lower interest rate than your existing debt. Having a lower interest rate makes payments more manageable and allows you to have a shorter payoff period. The option that will suit you best will depend on your overall debt, history, credit score, available cash, and other financial aspects. Debt consolidation works best when your ultimate goal is to pay off debt

Tuck Associates will give you the three most effective way to consolidate credit card debt:
1. 0% Balance Transfer Card
2. Personal Loans
3. Home Equity Loans or Lines of Credit

1. 0% Balance Transfer Card
This type of credit card charges no interest for a promotion period, often 12 to 18 months, and allows you to transfer all your other credit card balances over to it. In order to do this, you'll need to have an excellent credit score - typically above 690 in order for most cards to qualify. You'll definitely want to make a budget to pay off your debt by the end of this introductory period because any of the remaining balance will be subject to regular credit card interest rates. The pro is a 0% introductory interest rate. Cons are required good to excellent credit, usually carries a balance transfer fee, interest kicks in typically after 12 to 18 months.

2. Personal Loan
You can use an unsecured personal loan from your local bank or credit union or an online lender to help consolidate credit card or other types of debt. This loan should give you a lower interest rate on your debt in order to help you pay off your debt faster. Credit unions tend to be the best places to get a personal loan first. Most credit unions will offer their members a flexible loan with lower interest rates than bigger banks can offer you - especially if you have a low credit score. The maximum annual percentage that a federal credit union offers is much lower than an online bank can offer. Online lenders typically let you pre-qualify for a debt consolidation loan without affecting your credit score. Typically for online lenders, the lowest rates go with the best credit scores, and lower credit scores get upwards of 36% interest rate. Some pros include fixed interest rate and monthly payment and a fixed payment period. Some cons include lowest rates go to those with excellent credit, may carry an origination.

3. Home Equity Loan or Line of Credit
Homeowners, rejoice. If you're a homeowner, you can take out a loan or line of credit on the equity in your home. A home equity loan is a lump-sum loan with a fixed interest rate, while a line of credit works like a credit card with variable interest rates. That money can be used to pay off your credit cards as well as other debt that you have. Some pros include a lower interest rate than an unsecured loan, having good credit is not required. Cons include but are not limited to future to pay could result in losing your home and repayment terms can be 10 years or longer.


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