Budgets, Taxes & Your Fresh Start

Once again, it’s tax time in the USA, and even though you’re digging through all of your receipts, statements, and paperwork from last year, it’s never too early to start thinking about this year!   If you’re like most people, as you go through all those papers, you’re looking at what you spent on things like groceries, electronics, utilities, and credit cards, and it can get pretty depressing.  You look at all those payments, and you start thinking that it’s really hard to ever get ahead when you’re paying so much interest every month.  You wonder if you’ll ever get everything paid off so you can relax and maybe even have a little bit of money left over in your budget at the end of each month.

Well, 2019 just might be the year that you are able to do that, if you’re ready to take the bull by the horns and make a few smart moves with your credit cards!

First and foremost, if you ever want to get them paid off, you’ve got to stop using them!  Gather up all your credit cards, take them out of your wallet or purse, and put them away.  That’s right, put them away.  Put them in a box, file, or on a shelf, but don’t carry them around any more.  If you don’t have them with you, you won’t be able to use them for those impulse buys!  And, chances are, if you have to go home to get one of your credit cards, you won’t go back to the store and use it.

Secondly, you’ve got to make a plan to pay off the bills that you already have, and you have a couple of options to accomplish this.  You can utilize money you have in savings, you can consider balance transfer options with introductory rates, or you can take out a personal loan.  All three of these options have both pros and cons – using your savings can eat up the cash that you have on hand, and should you have an emergency expense later on, you’ll end up having to use a credit card to pay that expense.  Taking advantage of a balance transfer option on a new or existing card is a great option as long as you are able to pay the balance off within the allotted time frame – if not, you’ll face a huge interest charge when the introductory period ends.  And finally, taking out a personal loan does involve interest charges, but typically those interest rates are less than credit card interest rates, so you do save in the end.

Which option is for you?  While the balance transfer is a good option for those who don’t have much credit card debt to pay off, when you need to consolidate a lot of credit card debt, a personal loan is usually the easiest way to pay off everything, lower your monthly payments, and still keep your emergency cash in savings.

Think a personal loan is the right choice for your financial situation? Take a look at these lenders and see if one fits the bill:

Low Rate Credit Cards for Debt Consolidation

Owning and using multiple credit cards could possibly be beneficial. But it could also be illogical and impractical especially if you are incurring too much debt on those cards. Furthermore, you may realise that most of your credit cards could come with higher interest rates. If not used responsibly and properly, the use of many plastic cards could leave you in ruins, especially if total debt has become too great to handle.

For sure, you may own a low-rate credit card. Are you aware that you could use that card to consolidate all your other credit card debts at less cost? If you do not own one, it is the right time to find and own a low-rate credit card that offers lower interest rates particularly on balance transfer transactions. Consolidating all or most of your credit card debts into a single low-rate card could help you manage your overall debt effectively and infinitely.

It is logically more advantageous and ideal to transfer debts in high-rate cards into a low-rate one. It is like assuming a lower interest rate on all of your credit card debts. Needless to say, that could be a great strategy and start if you aim to eventually unburden yourself from the accumulated debts you have incurred from the using your credit cards. You could find more interesting and attractive options.

Low-rate card products

There are credit card products that even come with 0% rate on balance transfer, but within a specified period (usually around 6 to 12 months). You may have such a card and use it if you intend to transfer your credit card balances and repay all of those within the time specified. Beware because most of such cards assume higher interest rates on balance transfers after the period specified for implementation of the 0% rate.

Alternatively, there are low-rate credit cards that are meant specifically for balance transfers. You should get hold of any of those. Some of those even come with much lower introductory rates, which you could take advantage of as you gear up to clear your credit card debts. Just make sure the credit limit assigned to you would be sufficient to cover possibly all of your high-rate credit card debts.

Possible advantages

There are so many advantages of using low-rate credit cards for debt consolidation. First of course, you could rave about the lower costs on interest rates and other fees. Second, you could enjoy the convenience of having to mind a single credit card debt bill each month and paying just that. You would never have to worry about possibly forgetting to pay one credit card due every time, which would incur additional charges through penalties.

Lastly, the use of most low-rate credit cards for debt consolidation is much easier. You could actually complete balance transfer transactions online, in as fast as just a few seconds or minutes. By this, you could expect to generate positive scores on your personal credit rating. Meanwhile, you could assume a more lenient and practical financial planning to repay your credit card balances that are unified into a low-rate credit card.

Andrew has been writing about credit card debt consolidation and credit card debt for the last 3 years

The Best Debt Consolidation Options for Homeowners

Debt relief programs now come a dime a dozen. As more people experience issues with managing their debt, the popularity of programs has surged. Although many professional companies are available to assist consumers, it is important that individuals seeking help understand their options. Two common debt consolidation options for homeowners include cash out refinancing and home equity loans.

Understanding How Cash Out Refinancing Works

Cash out refinancing is a popular method amongst individuals desiring to consolidate their debt and ease their financial burden. The process involves homeowners borrowing money against the equity in their home to pay off unsecured debt. The way it works exactly is that the homeowner refinances their loan for more than the current balance of the mortgage and keeps the difference. The homeowner typically pays closing cost with cash out refinancing. The cash out refinancing replaces the homeowner’s original loan, and the interest rate on the new loan is typically lower than the previous loan’s interest rate.

Benefits of Cash Out Refinancing

• Cash out refinancing does not add to a consumer’s debt but simply restructures it
• Consumers enjoy a fixed payment plan and a single loan payment
• Allows consumers to become debt-free
• Consumers pay a lot less in interest

The Basics of a Home Equity Loan

A home equity loan differs slightly from cash out refinancing because a home equity loan is an additional loan that does not replace the original loan. In most cases, homeowners are not required to pay closing cost on home equity loans. A home equity loan is especially attractive to individuals wanting to consolidate their debt but do not have great credit scores. Many lenders relax their credit requirements for homeowners because the home serves as collateral, which means that the lender considers the loan less risky. For consumers who value their homes, they are likely to make the payments on their home equity loan.

Benefits of a Home Equity Loan

• Qualifications are easier for individuals with bad credit
• Multiple high-interest debts are replaced by a single debt with a lower interest rate
• Homeowners can typically borrow large sums of money
Legitimate debt relief programs can help owners further understand their consolidation options through free credit counseling sessions. The best option chosen by consumers will depend on their personal financial situation. Not all companies offering debt relief assistance are the same, so it is imperative to review the history of a company before agreeing to work with them.

Best Tips for Choosing a Debt Consolidation Company

Using debt consolidation can be an effective way to grab the reins of your financial life and get your debt situation back under control. Many consumers in this situation choose to use a debt consolidation company to help with the process instead of going it alone. If you find yourself in the market for a consolidation company, there are a few things that you’ll want to pay attention to.

Fee Schedule

When working with a consolidation company you have to find out how they charge for their services. Some companies charge a flat fee for helping you with the consolidation process while others charge a fee that is based on a percentage of your debt. Neither option is necessarily better than the other, but you need to make sure that you are dealing with a legitimate company before ending over any of your hard-earned money. Some companies have been known to ask for large upfront fees and then not do what they claimed they would do.

Check the Company’s Record

Before selecting a company to work with, make sure that you check out its long-term record. Most legitimate companies are listed on the Better Business Bureau website. As a consumer, you have the ability to get on the Better Business Bureau website and do a search for free. You can look up a company and see if it has any complaints registered against it. If you look up a company and it has a large number of complaints that have not been rectified, you should be a little bit leery of working with the company.

In addition to checking with the Better Business Bureau, you should also check out some other review sites to see what customers have to say. There are number of consumer review websites that you can look at in order to get a good idea of what companies have to offer. Just make sure that you are reading legitimate reviews instead of thinly disguised affiliates trying to get you to sign up for a service. If the review has a link to sign up for the program, you should be skeptical about doing so.

Making the Decision

Any decision in this area should be made after careful consideration and research. Once you find a company that has a fair fee structure and a good reputation, make the decision and start working towards eliminating your debt over time.