If you have credit card debt, you’ll appreciate that it is expensive to fund – interest rates are very high and there are other hidden fees.
To help you get out of the cycle of crippling credit card debt, here are 5 reasons to talk to a mortgage broker for advice about ways to consolidate your credit card debt:
Interest rates are high
Why do most people consider switching credit cards and consolidating debt?
Because the interest rates on their existing credit card are ridiculously high and costing them too much money. Fact – not all credit card providers offer the same interest rate. And with some offering very competitive rates, it can make sense to explore your options.
Beware of any hidden costs and honeymoon periods that end with another high interest rate, of course, but researching ways to consolidate all your credit card debt into one card with a lower rate, can be a smart option that can save you lots of your hard earned $’s.
Reducing annual fees
In recent years, many credit card issuers have asked customers to pay an annual usage fee for their credit card.
In some cases, this annual fee is an expensive one – and if you have multiple cards, the annual fees can add up quickly.
But with so much competition in the credit card market, there are many credit card providers that offer no membership fees as a way to attract new business – and that can mean real savings for you. Just make sure that the savings on membership fees is not wiped out by a higher interest rate and other charges.
You can consolidate your credit card debt as a personal loan
The reason so many people get into trouble with credit card debt is because they don’t know how to budget effectively.
Meeting minimum monthly repayments to your credit card company is not a good way to budget – it means you are paying too much interest.
By consolidating various credit cards into one personal loan with a lower interest rate and a fixed monthly or fortnightly repayment, you can reduce interest and save.
To repair a bad credit rating
When credit card worries get on top of you, your credit rating can take a massive hit.
To help you get on top of this and start undoing some of the damage done, debt consolidation can be a good choice. Be aware that if your credit rating has suffered you may have fewer choices to refinance but by talking to an experienced broker, you can explore your options and starting turning negatives into manageable positives to create a less stressful financial future.
If they are paying you to do it
When one card issuer knows you have an existing credit card, they may ask you to transfer the balance of your outstanding debt to them – and in return they’ll offer to reduce some of your outstanding balance. Be warned – often they are locking you into a deal that might seem like a short-term fix but could cost you more in the long-term. Talk to your finance broker to help you find a deal that will make you better off – not worse.
If you have any questions about your finances, either personal or business, please do not hesitate to contact Shane Hocking at SPH Mortgage Brokers on business mobile 0403 336 160 or email email@example.com