#credit card debt consolidation
Credit card debt consolidation
By Ben Woolsey and Emily Starbuck Gerson
While in the past, financial advisers may have recommended using a second mortgage or home equity line to consolidate credit card debt, today’s real estate reality makes this a dangerous game. Instead, you can simply transfer your balance to a low interest credit card. For example, if you have a $10,000 outstanding balance at 20 percent APR, over the course of a year you would pay $2,000 in interest charges alone. If you consolidated your credit card debt onto a credit card with a 10 percent APR, you would save $1,000 in interest. See our balance transfer calculator to test your own scenarios.
We think the best idea is for consumers to better manage their finances and cease all use of credit cards immediately, until out of the dark financially, Walker says. If they need help, it’s out there. Consider enlisting the help of an accredited credit counseling service if you feel like you can’t do it alone.
Published: December 30, 2008
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