How Can I Consolidate All of My Debt for Cheap?

By Larry Amon

  • Overview

    If you have a lot of debt and you have it spread out over several different credit cards, loans and other vehicles of debt, you may likely benefit from consolidating. Sometimes consolidating will save you money by paying less in fees and oftentimes it will make it easier to pay just one or a few bills instead of many. But you need to be careful how you consolidate your debt or you could wind up paying a lot more than you expected. Consolidating debt is always easier if you have better credit; if you have less-than-perfect credit, there are still some good things you can and should do.
    • Step 1

      Read and research anything that you do that deals with money, whether it is borrowing, buying, lending or spending. Research may take time but will be well worth the money and hassle it saves you. Some people like to refinance their homes to consolidate debt, but besides needing good credit to do this, you also have to pay fees. It still may save you money though -- or so it seems -- but whether you're refinancing or using a line of credit, you are likely just spreading the cost out over many more years and in the end paying even more.
    • Step 2

      Get rid of debt you don't need. Thoroughly get rid of unnecessary expenses and don't create more. If you have a newer car, sell it and get something less expensive.

    • Step 3

      Negotiate with credit card companies. Consumer credit counseling services negotiate lower fees for unsecured debt and they have channels to do so. You may choose to use one of these services if they don't charge you anything. However if you call or write the credit card company, you may be able to negotiate something with it. A written letter is probably better as it gives a record and may reach the correct person while a phone conversation may be limited to lower level workers who might not have the ability to negotiate.
    • Step 4

      Pay the minimum on the credit cards you owe money on, plus pay the most you absolutely can on your card with the highest interest rates. Once you have paid the highest rate card off, then start paying the most on the card you have left with the highest rate, continuing until all of your cards are paid off. Close the cards as you pay them off.
    • Step 5

      Sell what you don't need. If you can make even fifty or a hundred dollars here and there, then sell the things you really don't use or don't need to consolidate those bills more quickly.
      How Can I Consolidate All of My Debt for Cheap?
    • Skill: Moderately Easy
    • Tip: Beware of debt consolidation methods that might have hidden financial, legal or other costs.

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