If one or more of the following applies to you, debt consolidation may be in order:
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You pay for normal living expenses with credit
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You transfer balances around from one credit card to another
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You can only afford the minimum monthly payments on your credit cards
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You have maxed out one or more credit cards
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You find yourself spending more than half your income to pay your monthly credit card and auto loan payments
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You're looking to open yet another line of credit in order to better manage your current debt, expenses, and lifestyle
Some of the most common ways to consolidate debt include:
Whichever option you choose to consolidate debt, just be sure that the new debt is cheaper than your current debt. In other words, after fees and finance charges are taken into account, will you be paying less to borrow the same amount of money through debt consolidation than you currently do with your debt dispersed as it is.
Once you’ve gotten a handle on your debt, the next step to financial freedom (and to keep you from winding up in the same position again), take the money you’ve freed and start building up an emergency fund.