Ways & How

how to consolidate debt

how to consolidate debt

Credit and debit cards are payment systems that are not new to families who need to take care of monthly bills and payables. It is seemingly easy to pay for all of these using your credit cards because you only need to worry about paying for them after a month, when the due date comes. More often than not, you only pay what the minimum payment requires. The balance from the previous month is added onto the next month’s bill and your debt rises up even more. However, most households carry with them two or more credit cards. In this case, a time may come when you find yourself drowning in credit card debts. This is an appropriate time to get help from an expert and learn how to consolidate debt. It may sound like it only takes a click of a finger to do, but you will need more than hard work, concentration and expert advice to complete the whole process. It may not be the best option for you to take, but it can offer immediate relief to your worries on credit card and other debts. Here are a few tips on how you can consolidate your debts:

  1. Create a list of all your debts and all that pertains to them.

    It is easier to consolidate all your debts if you know how much you owe, your balance, interest rates and monthly payments. Include in your list the debts you incurred on credit, mortgages, car loans and other personal debts.

  2. Decide how much you will pay on each debt when the loan is complete. Consider the amount you pay monthly for a debt that may last 12 to 20 years. When in doubt about the process, do not hesitate to ask help from an expert as this will lead you to make better choices.

  3. Get a debit consolidation loan as a second mortgage. Debit consolidation will give you immediate relief on debts; however, loan fees need to be carefully considered as they may add up.

  4. Consider balance transfer as an option. To pay for your debts on your credit cards, you can transfer balance from one credit card to another, especially moving balances from high interest cards to low interest cards. But before you do this, check how much you have on your card and how much you can transfer to another to keep both cards alive and still working.

  5. Borrow money. An alternative you can take to pay off your debts is to borrow money from a trusted family member. After settling down your debts with your credit cards, faithfully pay your family member the amount that you owe in a predetermined amount. Put into writing the terms and conditions, as well as the interest rate, so that all debts will be settled accordingly. If you’re lucky, you may have a family member who will be willing to lend you money without interest, and this will surely help you pay off your debts quicker.

It may be a tedious process but it can be done, you just need to look into all the options you can take so that you will not have to worry about your debt. You will also need to sacrifice on spending on specific items and take full responsibility on using credit cards so as not to incur further debts.  Going through the process on how to consolidate debt will benefit you and your credit card institutions. Some of the benefits that consolidating may provide are reduced monthly payments, eliminated interest rates on credit cards and freedom from debt in just a few years.


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