Pros cons consolidating bills
With as much of your debt at zero percent interest as possible, you’ll be in the best position to pay down your total debt load faster.Once you transfer your high interest balances to a card that offers zero percent interest, your minimum monthly payment on those debts should decrease.Although some balance transfer credit cards offer rewards on your everyday spending, you shouldn’t use your new balance transfer credit card for purchases until you are debt-free.Keep your balance transfer credit card in a drawer or in your freezer for safe keeping, and refrain from using any other credit cards while you’re still in debt.As an added bonus, this card doesn’t charge any type of annual fee. Plus, you can earn between 1 to 5 percent on purchases made with the card thereafter.You will need to pay a balance transfer fee of 3 percent to transfer your outstanding debts over, however. In a lot of ways, using a balance transfer credit card might be a band-aid solution.Here are some of the main reasons debt consolidation is rarely the best way to get out of debt: While it’s true that debt consolidation can help you merge all of your debts by getting a loan with one monthly payment, you may not actually save money by the time you complete the process.
If that’s the case, you’ll spend even more time in debt than you are spending now, plus potentially pay more interest as well.If you ran up dozens of credit card balances and consolidated them for peace of mind, what’s to convince you not to do the same thing again?Without a long-term plan to avoid debt and change your spending habits, you could easily end up worse off than when you began.However, you should keep paying as much as you can each month no matter what.If you don’t repay your balances during the zero percent interest introductory offer, you won’t be much better off when it’s over.