Credit Card Debt Payoff with Personal Loans
There are lots of smart tricks to get out of credit card debt which heavily indebted customers are ready to try. Especially now, as Christmas time is not far off and you need some extra funds to buy presents, let alone the healthy wish to welcome the new year free from any financial obligations. Do you feel upset and even frustrated due to the piles of bills unpaid and the importunity of debt collectors?
Personal loan could be an easy and relatively safe way to eliminate your credit card debt and if used wisely, you cold soon forget about your long sleepless nights.
There are some things that stand for the personal loan as a more effective means to pay off your credit card debt as compared to a range of others. Try to understand them and you will see that it is much wiser and safer to take out a personal loan than, say, to transfer balance onto another, lower interest credit card.
The following tips will benefit mostly customers that, thanks to their favorable credit rating, can qualify for a loan with a lower interest rate than that on your credit card. Otherwise, the whole deal will be a failure.
So, why would you opt for a personal loan when there is such a wide choice of balance transfer credit cards offering you lower rates and no annual fees?
Two arguments are enough.
First, you do not have to pay balance transfer fees. When you apply for balance transfers and get approved, you are required to make a one-time payment - a fee and it can be rather high. As to a personal loan, there is not any sign-up fee and you save hundreds of dollars on that.
Second, it is safer to apply for a personal loan for another very plain reason. It is not a revolving credit and you cannot borrow more than you already have. So, what do you do? You take a loan the amount of your credit card debt and just cover the debt. No more money to play with, as you can understand.
In case you chose a low interest credit card, you would no doubt get the temptation to spend more and a new debt would inevitably impend over you. Only most disciplined and responsible credit cardholders can eliminate the debt with another plastic. Want to challenge the strength of your will? Try to make a balance transfer but watch your spending closely!
In case you have chosen a personal loan, consider the following. Do not cancel all of your current credit cards as it will hurt your credit score. The longer the relationship with your bank is, the better the credit rating and higher the score. Leave at least one credit line open to keep up the relationship that will add up to your payment history and increase your credit score.
So, a personal loan seems to be a smart way out debt both for your current situation and the future ability to get low interest.
Do not be deluded into the inefficiency of a traditional loan. It will always exist and will always be more secure, though not so liberal, than a credit card.