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5 tips about Debt consolidation
Debt consolidation is a way to financial freedom, having a
positive impact on the credit rating. Credit rating, quality of
living, and the impact on the family, are affected when
creditors harass for payment and the payment made causes...
All about Debt Consolidation loans
Debt consolidation loans can be the answer to a number of financial problems, but before you take the plunge, make sure you're well informed.
What is a debt consolidation loan?
Debt consolidation is when you arrange a single loan to cover a...
Canadian Debt Consolidation
Life throws people a number of challenges often on a daily basis and unfortunately, some of those are financial challenges. The loss of a job, an illness and many other situations can make paying off loans difficult to do. Sometimes people simply...
Debt Consolidation Loans - Defining the Pros and Cons of the Method.
Debt consolidation agencies allege that debt consolidation loans can help create savings for its customers by reducing the amount to be paid for debts. The manner in which this will be realised is not immediately comprehensible to most people. Why...
UK Credit Card and Debt Consolidation Loans
Your current situation.
You have got several credit and store cards and several
loans. You are finding it difficult to make the payments
each month. Generally you do make the required payments but
this means that other parts of your like are...
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Using 0% APR Credit Cards to Become Debt-Free
Normally, when you're looking to consolidate credit card debt
you have the following options: get a debt consolidation loan
-or- apply for a home equity loan. But if your credit card debt
is still manageable, you may want to consider consolidating your
balances to a 0% APR
credit card instead. Using a 0% APR credit card will help
you spend more money paying off your balances, and less on
interest charges!
To use a 0% APR credit card to pay off your debts, follow these
steps:
1.) Transfer your existing credit card balances to a new 0% APR
credit card.
2.) Continue to pay down your balance as usual. But instead of
paying only the minimum each month, also pay the amount of
interest you would have paid with your other card. This will
reduce your debt even quicker!
3.) Watch your introductory period. When it's about to expire,
shop around for a new 0% APR credit card and transfer your
balances again.
4.) Continue this cycle until you become debt free!
0% APR Credit Cards vs. Debt Consolidation:
So you're considering a debt consolidation loan instead of a 0%
APR credit card. Let's see how much you could save and how much
quicker you could pay off your debt using the method shown
above. Here's an example:
Assume you have an existing credit card debt of $15,000. You
would like to pay $250 per month until the debt is paid off.
Your debt consolidation loan was approved at 7% (much lower than
your original 12% credit card!).
Beginning Balance $15,000
Total Principal Year 1 $2,014
Total Principal Year 2 $2,160
Total Principal Year 3 $2,316
Total Principal Year 4 $2,483
Total
Principal Year 5 $2,662
Total Principal Year 6 $2,855
Total Interest Paid $3,516
Total Amount Paid: $18,516
TOTAL # Payments Made: 70
Now let's compare paying off this same debt using 0% APR cards
Beginning Balance $15,000
Total Principal Year 1 $3,600
Total Principal Year 2 $3,600
Total Principal Year 3 $3,600
Total Principal Year 4 $3,600
Total Principal Year 5 $ 600
Total Interest Paid $ 0
Total Amount Paid: $15,000
TOTAL # Payments Made: 50
You save $3516 over a six year period! Plus you'll be done with
your payments 15 months sooner! Imagine being debt free over a
year before you planned!
Words of Advice:
Although using 0% credit cards to pay down your debt is a great
option, try not to switch credit cards too frequently. Doing so
can negatively impact your credit report. Shop around for 0% APR
credit cards that have the longest introductory periods and the
lowest APRs (after the intro period) to buy you a little
breathing room. Also, don't fall into the trap of spending again
on your old credit cards. Either close them or deactivate them
so that you don't get yourself into further debt. And don't
overspend with your new card either (even if it is 0%)! Finally,
make sure you apply the money you saved on interest to your new
payments to help eliminate your debt faster.
To see a complete list of 0% APR credit cards, please visit:
ASAP Credit Card
About the author:
by ASAP
Credit Card - Copyright © 2005
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