Credit Card Consolidation: What to Know and What to Do
If your credit card balances feel overwhelming, consolidation could help you get a fresh start. Consolidation lets you pay off your existing debts with a loan, so that you are left with only one payment to make each month, often with a lower interest rate than your credit card accounts. However, credit card consolidation is not the right solution for everyone. Your credit union can help you understand how this option might work for you. This information will also help you consider your options.
What is exactly is credit card consolidation?
Credit card consolidation involves using a debt consolidation loan to pay off your credit card balances. After those cards are paid off, you will only have your monthly payment for your loan to worry about. If you have a significant amount of debt across multiple credit card accounts, consolidating those balances into a single loan can greatly simplify your repayment efforts.
What are the benefits?
Consolidating your credit card balances is convenient. It removes the risk of forgetting a payment because of multiple due dates. With consolidation, there is only one due date, which is more convenient. However, the biggest benefit of consolidating your credit card debt is that it can save you money. With a competitive rate on your debt consolidation loan from your credit union, you will save money that you would have spent on interest on your credit card accounts.
Who should not consider consolidation?
Consolidation is only helpful if you can commit to not using your credit cards after you pay them off. Using your cards again will leave you with both the loan payment and new credit card payments due each month. Working with your credit union on a debt management plan can help you maximize the benefits of debt consolidation.
To find out if a debt consolidation loan is right for you, contact GCS Credit Union today. All of our loan decisions are made with member-first service in mind with local processing. Call our credit union in O’Fallon today at (618) 797-7993.