Have you ever heard about debt consolidation? Debt consolidation is believed to be the way to pay off your credit card debts easier. Basically, it works by combining several debts and you can pay them off during a time period with a lower interest. But, not many people have enough knowledge of this. So, what is the best way to consolidate credit card debt?
Before talking about consolidating credit card debt further, let’s take a look at its definition first. Debt consolidation is done by combining several debts to be paid to a multi finance or peer-to-peer lending company (other than banks). This article will give you a guide on the best way to consolidate credit card debt, along with some tips. There are two types of ways to consolidate credit card debt.
- Card Cutter
In this program, you can consolidate some credit card debts with a minimum total of 10 million rupiah. In this program, the debts usually haven’t piled up. You don’t need any warranty, just register yourself to a card cutter program and your debts will be consolidated.
- Card Cutter Plus
This program also allows you to consolidate credit card debts with a minimum total amount of 10 million rupiah. The difference is, the debts in this program are already piling up. There will be a negotiation process before consolidating your debts so you can pay with a lower interest rate. This is the best way to consolidate credit card debt if you have lots of it.
Tips to Choose the Best Way to Consolidate Credit Card Debt
- Choose a creditor that’s registered at the Financial Services Authority (OJK)
When you have a registered creditor, your personal information will be more secured. Of course, you don’t want unauthorized people to have access to your personal information, including your current economic status. This is the first best way to consolidate credit card debt.
- Get a timeline of the debt payoff
After choosing your trusted creditor, ask them to explain the scheme of how you will pay off your debts in the long run. If the debt payoff will last for 24 months, get a clear view of how much you have to pay each month, and whether or not you can follow the program.
- Make sure the installment per month is lower than the current one.
If the amount or installment or the interest is still the same or even higher than the current one, consolidating credit card debts is useless. If you’re looking for the best way to consolidate credit card debt, this is important to remember.
- Rational warranty
A corporation that offers the best way to consolidate credit card debt will require you to provide a sensible warranty. For instance, if your debts are not that much, then you should be suspicious if you are asked to make your house a warranty.
Those are the best way to consolidate credit card debt and some useful tips to follow. Always remember to use your credit card responsibly to avoid debts from piling up and hard to pay off.