If you’re wondering how to consolidate credit card debt without hurt your score, there are several things to consider before you make your decision. Taking on more debt can be detrimental to your credit, so you’ll want to choose a method that won’t make things worse. The good news is that debt consolidation is possible, and many credit counseling services can help you. In fact, debt consolidation can be an effective way to organize your debt payments.
There are several methods for consolidating credit card debt, but the best one for you depends on your credit score and amount of debt. Some options require applying for a credit card that charges a higher APR than your existing balances. Another option involves refinancing your existing balances into a balance transfer credit card, but this option is only suitable for people with good to excellent credit. After the introductory period, the higher APR will start.
Another option is to use a debt management plan, a program offered by a nonprofit credit counseling agency. This plan allows you to consolidate your debt without hurting your credit. If you don’t have the money to make the monthly payments, you can opt for this option. This option comes with modest upfront and ongoing fees. While debt consolidation may seem like a daunting task, with the right strategy, it can be done without hurting your credit score.
A good credit score is based on your payment history, so make sure you pay your debts on time. If you’re already drowning in debt, it will be detrimental to your score if you take on more credit. Nevertheless, this type of debt consolidation can help you manage your finances better and improve your credit score. If you’re desperate, it may be worth the momentary hit in your credit score.
When choosing a balance transfer card, take note that balance transfers can have a negative effect on your credit score. In most cases, these cards have lower credit limits than the original card you consolidated debt with. But balance transfer cards allow you to aggressively repay your debt, and the payment you make to your new card goes toward the principal debt. This will lower your balance and improve your credit utilization rate.
While debt consolidation is a legitimate way to get out of debt, it may not be the best choice for you. If your credit score is already low, you might be better off settling for a debt management plan or credit card balance transfers. This option is also less likely to hurt your score. If you can’t make the minimum payments, you can use your budget to pay off your debt.