Debt consolidation basically means that you are combining your debts into one manageable repayment as opposed to several separate bills. For example, a Debt Management Plan is an excellent way to consolidate your debts because you only pay one amount every month which is then distributed between your creditors.
At Baines & Ernst, we could negotiate a lower repayment rate with your creditors – ensuring repayments are as affordable as possible.
What is credit card debt consolidation?
Credit card debt consolidation basically means transferring the balance from one card to another card with low rates or 0% interest. This type of solution can make repaying the balance easier, however you will need ensure you to take a very disciplined approach to debt repayments, as the lure of credit card spending can be difficult to resist.
It’s not uncommon for debts to actually increase when people try to consolidate debts via balance transfers because they continue to spend on credit cards, often spreading purchases across a number of cards.
Your credit rating could also be affected as a result of transferring balances.
Two key areas people fail to explore when considering credit card consolidation:
- How long the promotional rates are available for
- What the interest rates / APR will be when the promotional rate ends
If your credit card debts are spiralling out of control, we recommend you choose a more effective debt management solution like a Debt Management Plan or an IVA.
Baines and Ernst Ltd