How to consolidate the debts of your credit cards?
Consolidating the debts of your credit cards is possible with a parallel credit. You can save money. Do you want to know how?
Using credit cards is a great experience, except when you overdo shopping and realize that it is not easy to pay.
Normally this occurs when:
- You assume that the card is a kind of additional income to your salary and you spend more than you earn.
- You use the card to withdraw cash.
- You differ purchases for many months (up to 48).
- You prefer to indicate that the payment will be “normal”; that is, you give the instruction to defer the purchase to 36 months.
- You forget that you can give the order when paying to divide the value into one, two or three installments.
- You usually pay only the minimum fee and not pay everything you owe.
- You buy a lot, thinking that you are able to pay in small installments.
It is in these cases that the impact of high interest rates on credit cards usually affects your cash flow, your ability to pay, your savings and your budget.
Can you do something about it?
Yes, you can consolidate debts into one, seeking to improve the rate.
In the financial market there are several players. Some charge more than others for their services. Your card is likely to settle at high interest rates (we have seen rates of up to 12.5% per month). Changing banks will be a good way to save.
This decision must be made before incurring default. Submitting loan applications when you are reported is a bad precedent.
Banks have a product called parallel credit line . This is credit equivalent to the quota that was approved in credit cards (between S / 1,000 to S / 50,000). And you will have between one to two years to pay the totality.
What is the benefit? Rate! This credit will be cheaper than the debts you already have. It will be easier to pay and you will save a lot of money. If you have average rates on your 40% cards, you will find who lends you 25% annual cash.
The bank will take care of paying your debts and, in addition, will give you a new card with preferential rate.
It is certainly a good business. And, above all, greater peace of mind. You only have to be aware of one date, instead of several, to meet payment commitments; and you will see how your cash flow improves, allowing you to live again.
Home equity loan
The second option is a home equity loan. If you have a property in your name and can offer it as collateral, it is an excellent opportunity to reduce the interest value of your debts.
Mortgage loans are the cheapest in the market (with rates below 10% annual cash, at the moment). You will exchange a high cost of money for the lowest; you will change a short-term debt, for a medium or long-term one; You will change the value of your monthly installments for more comfortable ones.
Obviously, the home equity loan has costs. The bank will make a legal study of the property, an appraisal and, if the credit is approved, the mortgage guarantee must be registered. In many occasions these expenses are not representative next to the saving that is obtained with the consolidation of the debts.
In any case, good advice is recommended. You will not want to make a credit card debt purchase to continue paying more.