| By :
Liz Roberts
Copyright (c) 2010 Liz Roberts There are two ways to manage credit card debt: acquiring a debt consolidation loan or a zero-interest balance transfer credit card. If you find yourself struggling with your credit card payments, consider how these two strategies can help you. Apply for a Debt Consolidation Loan A debt consolidation loan is a loan secured by a property. Any type of unsecured debt can be merged using a consolidation loan. Once approved, the money can be used to pay off all your credit card balances at once. This way, you can instantly stop your debts from further building up due to the interest rates and late fees incurred each month. After zeroing in all your debts, the next step is to pay back your debt consolidation lender. By choosing the right lender, you should be able to enjoy a lower interest rate and flexible repayment terms. If you are a homeowner or if you have other valuable assets to submit as collateral, you may choose to apply for a secured loan from a trusted lender. However, take note that in case of a default, your lender has the right to repossess your home, put it on resale, and use the proceeds to pay your debts. This is why consolidating debts should be done with utmost caution. Apply for a Balance Transfer Credit Card with 0% APR There is another way to merge credit card balances into one account. This is by getting a new credit card with a lower interest rate or a zero interest rate offer. The good news is that many credit card issuers offer zero-rate balance transfer cards. By transferring your balances from your high-rate cards to a new one, you should be able to keep up with your repayment more easily. More importantly, debt build-up can be eliminated because most balance transfer cards offer an introductory zero interest rate for its holders. The introductory rate can last from 6 months to 12 months. Other credit cards offer 0% APR for more than 12 months. As a cardholder, you can take advantage of this time period to pay off your debts without the additional costs. Nevertheless, not all zero-interest cards are worth taking. Before signing up, you need to be very clear about the Terms and Conditions of the issuer. Bear in mind that the zero interest rate is only applicable for a limited time. Thus, you want to make sure that the regular rate will still be reasonable. Otherwise, you could get stuck with a card that has even higher rate than your previous ones. The Key to Successful Debt Consolidation Whether you choose to apply for a loan or a balance transfer card, the key to debt recovery will depend on how well you manage your repayment. Submitting your payments on time is the key to successful consolidation. Aside from paying off your debts, you should also strive to improve your personal credit history. Find a lending company or a credit card issuer that will report your payments to the three major credit bureaus (Experian, Equifax, TransUnion).
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