How To Consolidate Credit Cards
If you’re having trouble paying back your student loans, you may well have credit card debt as well. Consolidating your credit card debt can be a good strategy to get out from under it, IF you can manage to stop using the cards.
If you’re in a hole, the first thing to do is stop digging! If you have been using the cards to make up for a gap between income and expenses, it’s very important to close that gap – by both reducing expenses (many people can do this almost instantly by, for example, cooking evening meals at home instead of eating out, brown-bagging lunches, using public transit instead of driving, cutting back on cable TV and telephone expenses) and increasing income (by, for example, taking a second part-time job, freelancing online or offline, making and selling crafts, offering childcare…).
Other tactics can include:
- moving the balances to a card with a lower rate (either by asking for a lower rate on an existing card, or getting a new card with a lower introductory rate)
- taking out a lower rate loan to consolidate credit cards
- using long-term savings to pay them off. Whether this is a good idea depends on the kind of savings and what your tax situation is. Get knowledgeable advice before you touch any retirement savings!
Credit card problems can be solved, but your behavior has to change to do so. You can’t fix a problem by acting the same way that caused the problem in the first place. Problems with credit card debt can also cause trouble by (lowering your credit score) if you’re trying to consolidate your student loans. Make it a priority to focus on paying off that high interest credit card debt.