Credit card consolidation
Credit Cards have always been the favorite of the youths and adults too as it give immediate access to purchasing power which can be paid later. The credit limit on the cards varies as per the profile of the individual but the facility of free credit period of 45days, is actually the key to its usage. Easy credit even makes us a bit careless and one ends up overspending. One often thinks that they will pay the credit card outstanding as EMI.
However, there are two things which must be taken into account while deciding about the EMI.
First, is the EMI amount small enough not to upset our monthly budget? If the EMI exceeds our monthly budget, it will lead to lesser payment and hence higher interest rate will keep on building up the outstanding amount rather than reducing it. Secondly, do you have a stable source of income, because in the current scenario wherein the world is reeling under financial crisis, many jobs are at risk?
As discussed earlier, it is better to manage our finances well. One of the methods is to opt for credit card consolidation. Let's look at some of the aspects of credit card consolidation:
- Different credit lines are merged into one.
- One needs to pay only once or against one outstanding loan and need not pay for individual debts.
- Low Interest rates on consolidated credit line
- No late payments
- And the most important, no reminder calls from the agents regarding payments if one has missed on them, as it might happen if one has to make multiple payment and each having a different payment schedule.
Process: One needs to find a consolidation company which has good reputation, market experience. Consolidation companies serve as a guide and manage all the payments for a monthly professional fee. They handle the interests in a fashion that it becomes easier of the customer.
However, one can do it themselves too. From the several credit lines one has, one should select the ones offering lower interest or zero interest rate and get their outstanding converted to them for a fee. However, one must check for the lower monthly installments and lower interest rates. A payment schedule with lower monthly installment is not necessarily good as it will have elongated payment term and hence one ends up paying higher interest.
Always think and weight the options before making a final decision. Read the terms and conditions and policies of the companies before making any online transaction with your credit card.