How To Consolidate Credit Card Debt

How do you view the credit cards in your purse or wallet? Some see them as a blessing and others see them as a curse and a cause of constant pain. However, is it fair to put the blame of your financial troubles on a little piece of plastic? Well, this may surprise you, but you actually can put some of the blame on that card. Ning Zhu, an associate professor in the felid on management at UC Davis has this to say about reckless spending, “The reasons people file for personal bankruptcy indeed have shifted during the past couple of decades. Although our research supports the notion that adverse life events, like losing one's health or job, contribute to personal bankruptcy filings, excessive consumption contributes more to the recent increase in personal bankruptcy filing." Since a credit card causes people to delay thoughts of consequences for their purchases, the physical credit card does play a role in your personal debt.

According to data obtained by the American Bankruptcy Institute, 2,039,214 bankruptcies occurred in 2005. This figure is up nearly fivefold when compared to data from 1985. The credit card debt problem is not going away anytime soon (hence the rise of credit card debt consolidation services). If you find yourself up against a wall, all your credit cards are maxed out and you are getting threatening phone calls and emails daily, then you may want to look into consolidating credit card debt.

The best way to get your credit card debt under control is by simply cutting your spending. Now obviously you cannot totally cut your spending or else you would be on the streets. What I mean is that you should cut all of your credit card spending. You must learn to live on cash and cash alone. The more you use your cards, the more debt you will have. I know it will be hard at first, but the sooner you can kiss the cards goodbye the sooner you will be debt free.

The next step you need to take on the credit card debt consolidation road is to start crunching some numbers. Dust off that old calculator that is sitting in your office and get to work. The goal of all this crunching is to determine how much total debt you owe on all of your cards. This would be your total credit card liabilities. You then need to go down the list of all your cards and find the minimum payments for each of them. Multiply this minimum payment by two, that way you are eating away at the principle and not just the interest, and then organize the cards, from highest to lowest, according to total debt. After you have this list, you need to find the cards with the highest interest rate that also have the highest balance. These are the cards that you need to attack first.

Now that you have completed the number crunching, it is time to hit the phone. Now you remember the first time you sat by the phone and hesitated dialing your grade school crush? Well, this is like that multiplied by 10. No one likes to call the credit card companies, but if it can save you some money it’s worth it right? Try giving yourself a reward after each call; this may help you get through your list. The goal of your calls is to lower your APR. You will be able to pay off your debt a lot sooner with a lower interest rate.

Now do not get off the phone just yet (hey, I heard that groan). While you are on the line, you should ask if your credit card companies offer any kind of assistance with credit card debt consolidation. If they do not then a credit card consolidation loan might be something to look into. If they do then try to get a low, long term interest rate. This will reduce your monthly payments and enable you to get out of debt quicker. If you are lucky enough to get a 0% balance transfer then you can put all your focus on paying down that principle and not interest.

Now that you have all the information you need, it is time to take action. You will need to transfer all of your debt from your high interest cards to your low interest cards (or even a no interest card if you have one). Make a plan detailing how much you are going to pay down each card each month. If you make a solid plan and actually stick to it then you will finally see your credit card debt shrink. Now that you have this information, it is time to go and consolidate credit card debt now!