The upcoming holiday season is the best time for you to do your shopping when lots of discount sale will take place. You want to clear off all your credit card debts before the holiday season so that your credit card can have more room for you to do your shopping and a nice bump to your credit scores. There are a few options available for consumers, we identified the top 3 main ways that you can use to consolidate your credit card debts including balance transfer cards, unsecured personal loans, and home equity loans.
1. Balance Transfer Card
Balance transfer cards allows you to transfer your existing credit card debts and pay them off without being charged any interest fee. Normally, if you roll your credit card balance from month to month, you have to pay interest fees. This makes it hard for you to clear off your credit card debt when you don’t have enough income to do so. There are many balance transfer cards and you need to look for one that offer a zero percent intro period that is long enough for you to clear off all your balance. This is because you will have to pay the normal APR interest when the zero percent intro period ends. The zero percent intro period usually last from 12 – 21 months. You need at least a good or excellent credit score to get a balance transfer card with long zero percent intro period.
2. Unsecured Personal Loans
You can also take out an unsecured personal loan with a lower interest to consolidate your existing credit card debts. It is easy to obtain unsecured personal loans online from P2P platforms and online lenders. Many online personal loans have fixed interest rate so you make the same monthly payment every month. The fixed payment period let you know when your debts can be fully cleared if you promptly make repayment every month. The interest rates is not the only fee you pay and you should look out for other fees like origination fees. If you have excellent credit, you will be able to get a personal loan for debt consolidation at the lowest rates.
3. Home Equity Loan
Home equity loans are another option for those who are seeking to consolidate their credit card debts. With home equity, you are borrowing against the market value of your home. The downside of getting a home equity loan is that you need to use your house or car as a security deposit. If you neglect to keep up with payment, they will repossess the property that you use as the security deposit. Home equity loans have repayment term of up to 10 years or more. Since home equity is a secured loan, it is easier to take out that loan and you don’t need to have a good credit for it.