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Credit card debt: How to organize them

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By: anonymous
on 26th Feb,2014

In the long run, you will find that this will help you in saving quite a lot of money in interest charges.
Credit card debt: How to organize them

If your mail is full of credit card bills, then it's high time now to organize your credit cards. It will be quite a good option to consolidate the debt to a lower-rate card. In the long run, you will find that this will help you in saving quite a lot of money in interest charges. In order to know how you can organize your credit card debts, read on…

Decide how many cards and which cards you need to keep:
You may wish to reduce the number of credit cards that you have. While doing so, you should keep your credit needs in mind. If you have multiple department store or gas cards that you never use, then you should try to get rid of those cards before anything else. 

Decide whether or not consolidation is necessary:
It is very important to decide whether you want to lower your interest rates or lower your monthly payments or increase the loan term. You can take the help of a professional debt relief company who will help you decide whether or debt consolidation will be a good option for you.

Decide on balance transfer:
Balance transfer can be a good way to get rid of the debts. However, before doing so, you should read the fine print on your agreement and check out the terms and conditions. If you have any doubts, you should clarify with your creditor.   You should always clarify with the creditor about the time period for which the current rate would last. Apart from this, you should also check out whether or not the current rate will apply to transferred balances or new purchases or both.

Steps to follow while paying off credit card debts:

  • Pay off those credit cards first which have low-balance. Then, you can close those accounts.
  • Remaining balances should be transferred to a card with the lowest interest rate.
  • Until the balances are paid off, don't use this card in order to avoid additional interest charges.
  • Close the account when the balance is paid off.
  • Choose two or three cards with high limits and try to retain them.
  • Be sure to pay off the debts on these cards in full each month.

Avoid the following costly errors:

  • Avoid canceling a card that still has a balance. Pay off the balance and then cancel the card.
  • Avoid balance transfers on cards which have a high interest rates or fees.
  • Avoid being delinquent on your credit card payments. Your low rates will disappear if you're delinquent on your payments.
  • Avoid canceling cards before you apply for any kind of mortgage or car loan. If you do so, it will lower your chances to get favorable terms.

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