Strategies to Pay Off High Interest Rate Debt

If you are sitting with a large balance on a credit card that has a high interest rate then you might be feeling frustrated as your monthly repayment is being used to pay the interest rather than the balance, which means your debt will only be reduced by a small amount each month. Paying off your high interest rate debts first will save you money in the long run, but this might not be the best method to undertake due to your finances.

credit card debt

Here are some top strategies that you can implement to help pay off your high interest rate debt.

Need a Lower Interest Rate – Just Ask

There are creditors that might be willing to lower the interest rates, but this generally goes to the best cardholders, which are the ones that have always paid on time or have only missed one or two payments.

If you have been getting lower rate offers from other credit cards then you can use this in your negotiations for a lower rate.

Make the Transfer to a Low Interest Rate Credit Card

You may only need a few months that are interest free to pay off your balance. You will find balance transfer cards that offer promotional periods where they do not charge interest. This could give you the break you need to pay off your balance without having to worry about the interest. Just make sure that you pay the balance before the interest kicks in.

If you are not able to move your entire balance to a single credit card then just move a portion as this will lighten the load and you can focus on paying this off before the interest is charged.

Take on Your Small Debts

If you are not in a position to first get rid of your high interest debts then you may want to consider tackling your smaller debts first. This will help you to free up some extra money that you can then use to pay down your high interest rate debts. You should create a list of your debts and determine which ones you can pay now and which ones will need to wait.

Once you have cleared a smaller debt, that money you were putting towards it should go straight to paying another credit card balance.

Wait…there are more strategies you can try…keep reading…

Pay The Most You Can

Due to most of your monthly payment going towards interest, you will need to pay more towards your payments in order for you to make any kind of progress in paying off your high interest debts. You may find it best to pay the minimum on all your other debts and any extra money that you have can go towards paying a single high interest rate debt.

Once one debt has been paid off you can start to work on your next highest interest rate debt and so on until you have cleared all of your debts.

Reduce Your Expenses

You will need to look at how you can squeeze your budget so that you have more to put towards your credit card debt. You can cut back on eating out, cut back on coffee, disconnect your cable, reduce your cell phone plan and so on. Making these cutbacks are only temporary and every little bit that you save to put towards your credit card debt will help your progress.

You Might Need to Wait

You may have to delay your debt free goal if you are not able to find extra money in your budget and are not able to generate any extra income. You should keep making the minimum monthly repayments on your credit card balances so that your credit score doesn’t take a hit and so that your debt doesn’t grow any further.

You will be wasting money on interest, but if you are not able to pay your high interest debts right now then wait a few months and then reassess your budget and expenses to see if anything has changed.

Get Credit Counselling

You can seek the help of a credit counsellor or a debt counsellor that will be able to create a debt management plan for you.

With a debt management plan, your creditors will lower your monthly payment and interest rate. You will not be able to use your credit cards during the process and your credit report may get a mark that says you worked with a debt counsellor.

The lower interest rates means that you can send larger monthly payments and you can ask that the additional payment goes to your higher rate first.

A debt consolidation loan is another option that you may have, but it’s not for everyone. This is where your debts are all housed under one loan, which means you will only have one repayment each month. This monthly repayment is usually lower and the interest rates are more manageable.

If you have high interest debt then you do need to tackle it whether, you pay smaller debts first or take on your largest and highest interest rate debt first. You need to look at how you are able to save money so you have extra to put towards your debt and determine the best strategy for you and your finances.

Manage Your Debt Problems

If you are facing debt problems then you need a sound debt management plan, which usually consists of three parts.

budget

Create a Budget

The first thing that you will need to do is to list all your sources of income no matter how big or small. Gather all your payslips, interest payouts, rental incomes, policy payouts etc. You need to know how much money you have to work with so you can avoid overspending.

Now you will need to list all of your monthly expenses, even those smaller ones that you may forget about. Determine how much you spend on groceries, utilities, entertainment, toiletries, subscription services, parking, snacks, eating out or takeaways etc.

Next, you will need to list all the credit providers that you owe money to and how much you have to pay each month. You will be able to find this information in your credit report.

You will need to allocate some of your income to a savings fund that creates interest. This money should only be used in a case of an emergency.

Also, there will be expenses that don’t occur regularly like holidays, a doctor’s visit, a wedding etc. You should have a contingency fund for these type of expenses.

Prepare a Debt Repayment Plan

You will need to have a good plan in place to avoid debt. Once you have your budget, you will have a better understanding of where your money goes each month.

You need to have the goal of paying your debt off as soon as possible by using any additional income or extra cash that you have into paying off your debt. You may find that you will need to make cutbacks in order to pay off debt.

You can focus any extra funds on a high interest debt first as once this debt is cleared, you will be able to free up some money that you can then use to pay off your second largest debt and so on. Or you can start with a small debt to get the ball rolling and tackle your largest debt last.

Stick to Your Plan

You may find that you are not keeping track of your accounts and expenses, which can then lead to unnecessary spending.

You then need to stick to your budget. You should update your expenses daily and review and adjust your budget every month.

You also need to avoid taking on any new debt and focus on paying off the debt that you have.

Paying off debt takes discipline and if you need further help, you can get advice from a debt counsellor and they may assist in creating a debt management plan for you.

 

10 Practical Ways to Cut Expenses and Save Money

If you need to save some money but aren’t really sure how or where you can make cut backs then take a look at these 10 practical ways that you are able to cut your expenses and save some money.

save money

Stop and Think Before Impulse Buying

Have you seen something that you absolutely must have? Well, before you buy it, stop and think about it. You should give yourself at least 24 hours before you really decide if you have to have it and giving yourself 72 hours is even better. You can save yourself quite a bit of money when you do this because even though at the time you thought you had to have it, you will realise that your life is just as satisfying without these things.

When the impulse buying urge kicks in, stop and give yourself a time out and go away from the item and think about it. You can also ask your friends and family to help you call this time out.

Find Low Cost Substitutions

You don’t need to give up on the things that you enjoy doing, but rather find low cost substitutions. For instance, if you are an avid book reader then why not go to the library instead of the book store or if you play golf swap a tee time for a trip to the driving range instead. You will be able to save a little here and there, but this can add up.

Skip Your Favourite Store

Is there a shop that you can’t resist going into and every time you do, you end up spending money? Whatever, your favourite store is the next time you go by it, just keep going and resist that urge to walk in. You need to break the habit of shopping for the sake of shopping, so find other things to do to occupy your time like going for a walk, reading a book or having a cup of coffee.

save moeny

If your weakness is online shopping then rather watch an episode of a show you enjoy or a movie or even a music video instead of shopping.

In order to make this work, you need to replace your shopping habit with a new habit and it is a lot more satisfying having your savings increase then just buying stuff.

Downsize if You Can

You may believe that our value is represented by the things we own, but making smart financial decisions is worthier. You should look at your lifestyle and see what changes you can make. This could be your house, your car or your clothes. You should look at where you can downsize and rather be financially secure then having a bunch of fancy things.

Use Your Car Less

You can cut down on the amount of times that you use your car, which will then save on your petrol. You can look at creating a carpool with other parents, for instance, for taking the kids to school or you can carpool with other employees once a week. Another option would be to use public transport if you can.

If you are still working, you can find out if it is possible for you to work remotely from home once a week.

If you have errands to run, then write them all down and get them done in one day and plan for times when there isn’t a lot of traffic. You could even consolidate and carpool all at once and run your errands with a friend.

Wait…there are still more ways to cut back and save some money…

Analyse Your Monthly Home Expenses

You need to take a look at your home expenses and see where you can save money. Take a look at your phone bill and see if you are paying for any extras that you don’t need, which can be turned off. Also, look at your satellite TV bill and see if you are paying for channels that you don’t need, which you are paying for every month as these expenses can quickly add up.

Also, turn off your heater or air-conditioning during the day and when you are not at home. It won’t be as comfortable in your home when you walk through the door, but the savings will add up.

Restrict Eating Out

It is easy to consistently buy your lunch or dinner, but this can add up to a lot of money if you are in the habit of doing it every day. You should take a lunch from home once in a while and before you head out for dinner or order a takeaway, check your pantry and see if you can come up with a creative meal at home.

If you have to eat out often, then skip the sodas, or alcohol or other drinks and go for water. This is better for you and will save you money on drinks when you have lunch or dinner.

Use Discounts and Promos

With a little effort, you will be able to pay less for most things. You will be able to find discount codes and sales that will save you money. Many online retailers constantly have offers where you can save money on clothes, household items and more, so you should check for these. Physical stores also have sales and offers, for instance, a supermarket might be offering discounts on certain products and even though it may not be your brand, you can give it a try and save some money.

shopping

However, be careful, many of us get lured into spending more because there is a sale. You should then resist buying things you don’t need and get what you do. Take note of the things that you already buy and find ways to get these for less or if you need new clothes, determine what you already own and what you need and only look for these items in the sale and not get tempted by other items just because they are on sale.

Cancel Your Gym Membership

Exercising and being fit is important and if the only way you are able to stick to an exercise regime is through a gym then keep your membership.

However, if you are a self-motivated type of person then there are plenty of ways you can stay fit without having to pay a monthly fee. You can walk, run, watch fitness videos on YouTube, do yoga, push-ups, sit-ups and more. You don’t need to pay to stay fit.

Turn Your Hobby into a Business

If you have a hobby, have you ever thought about turning it into a business? You may not make a lot of money, but you can make some to cover the cost of your hobby and maybe even a little extra to save.  So, if you have an arts and crafts hobby like beading, knitting, making jewellery, baking or anything else then see how you can make some money from it.

If you are horse rider, you can perhaps make a trade where you work in the stables for a few hours a week in exchange for lessons. You can do this for a number of hobbies and it doesn’t hurt to ask as you can still enjoy your hobby but without the cost behind it.

Implement some of these practical money saving tips and use the money you save to pay down any debt that you may have or put it away in a savings account and just watch it grow.

 

Start Living a Debt Free Life

If you are over indebted then a debt review could be the solution for you. You will have the expertise of dedicated and certified debt counsellor that will guide you through the process.

With Debt Expert, you will be protected from creditors as they will take over all negotiations for you. Your monthly payments are reduced by up to 60%, which means you will receive an affordable solution for your budget.

debt expert

You will be able to start leading a debt free life and also receive:

  • Immediate financial relief
  • Protection of assets
  • Protection against legal action
  • One reduced monthly instalment
  • Constant access to your progress
  • Credit record clearance

If you want to start your debt free life, get in touch with Debt Expert here and apply for your debt review.

4 Types of Insurance You Should Have

There are a number of insurance policies that cover almost everything, but there are 4 types of insurance plans that should be part of your financial strategy. These plans cover your health, your life and your possessions and not only offer you protection but also your loved ones.

Here are the 4 types of insurance that you should have.

Health Insurance

One of the most important insurance policies you should have is health insurance. Having good health allows you to work, earn money and just enjoy life.

health insurance

If you were to fall to a serious illness or suffer in an accident and are not insured then you may not be able to get the treatment you need or end up in debt.

Many companies will offer employees health insurance benefits, so you should check what cover your company is offering and take advantage of this benefit. However, it’s still good to look at all your options and compare plans so you get the cover you need.

You will need to consider premium costs, co-payments, deductibles, covered expenses and network coverage to determine which plan offers the greatest benefits.

If you would like to find a health insurance plan then you are able to contact insurers directly or you can browse the internet. You will find websites that will source and find the best health insurance plans for you, which allows you to compare plans easily and choose the best deal with the benefits you need.

Life Insurance

Life insurance is vital if you are married or have children, but everyone is able to benefit from life insurance.

There are a number of needs that life insurance is able to meet. If you are married, for instance, then it is able to substitute lost income, pay your debts after you die or pay for your child’s education. If you are single then your life insurance can be used for your funeral costs and to pay off any debts that you may leave behind.

If you do not currently have life insurance then you should first check with your employer as many employers will offer a basic life insurance and you might be able to buy additional coverage at an affordable rate. Apart from your employer, you will find plenty of insurance companies that will offer the coverage you need.

You will need to consider if you should buy term or permanent life insurance. Term life insurance covers for only a specific time, which is usually between 5 and 30 years whereas permeant life insurance will cover for your entire life as long as you pay the premiums. This type of cover also allows you to build cash value that you can borrow against or invest for growth.

Term life insurance does offer flexibility and is cheaper, but permanent life insurance is the better choice if you are looking for an investment.

Your age and health will determine if you are able to get life insurance. The healthier and younger you are then the lower the cost. Also, as part of your application you will need to undertake a medical examination.

Wait…There are still two more policies you need…

Property Insurance

When you have a mortgage, you will need to have homeowner’s insurance. When you borrow money from a bank to buy a home then they will need the asset to be insured and for many people, the insurance premium will form part of the mortgage payment.

Your home will usually be your greatest asset so you will want to adequately protect it.

home insurance

If you rent a property then you will need to get a renter’s insurance policy. The items inside your rental property can add up to a good amount of money. If you were to suffer from a theft, a fire or a disaster then you will need to have a policy that covers the cost of replacing these items.

Car Insurance

Another important insurance type that you need is car insurance and you will need to have at least basic car insurance that covers liability. If you are using a loan to buy a car with then you may need to add collision coverage to your policy. Liability insurance will cover damages to the other vehicle if you are involved in an accident and collision coverage will cover the damage to yours.

The main reason though for car insurance is its ability to replace an expensive asset. Your car costed money and if it’s get damaged you will want to be able to repair it or replace it.

Car insurance can also cover injury or death of another person involved in an incident that you are legally responsible for. It generally pays for medical expenses that are related to the incident and can also cover legal costs.

Car insurance will also have added on coverage that you can include in your policy, but just keep in mind that the more you add to your policy then the higher the premium will be.

These are the 4 types of insurance policies that you should have and if you don’t have them, you should start looking at these and getting quotes and comparing policies, so that you are able to choose the best policy for you and your budget.

Top Ten Reasons to Get Health Insurance

You will need to look after your health as you become an adult as well as that of your family’s. You are able to protect your health through the use of a health insurance policy. Having health insurance means that you and your family will be protected in times of unexpected medical expenses and it will help you to maintain a healthy lifestyle.

Here are the top ten reasons to get health insurance.

health insurance

Don’t Pay From Your Pocket

If you don’t have health insurance and you encounter a medical issue then you will need to pay for the medical bill from your own pocket, which can eat up your savings and even lead to debt. Health insurance can ease the burden of these medical costs like a major illness, a hospital stay or prescription drugs as the costs or part of will be transferred to the insurance company.

Peace of Mind

If you do not have a health plan then you are actually gambling that you will stay healthy. You might be young and in great health now, but as the years roll on it may not always stay this way. Also, your stress levels will increase when you don’t have a health plan, which will affect your health negatively. Getting a health plan will then give you peace of mind and you will feel better knowing that you are covered if any medical expenses come up.

Medical Costs are Cut

There are many people that will not get health insurance thinking that it will save them some money and that it will be cheaper just to pay for doctor visits. However, this is a mistake as you don’t know what the future holds and what operations or medications you will need and having health insurance will protect you when unforeseen occurrences happen and you will pay less for medical costs.

Visit the Doctor More

Health insurance will usually provide regular health check-ups so many times a year, which will help to reduce the incidence of ill health. This benefit saves the insurance company money and encourages the insured to have a healthy lifestyle.

Get the Medical Treatment you Need

Medical science has developed tremendously over the years, but this science is not available to everyone due to the costs. These costs will discourage the average person from taking timely action. However, when you have health insurance, you will be able to take timely action and get the help you need as the costs are reduced.

Wait…there are more reasons listed below…

No Need for Cash

Another constraint that affects timely treatment is that you might not have the funds on hand to pay. Usually, medical treatments require cash payments immediately on treatment and if you don’t have the funds then you won’t get the treatment. If you have health insurance, there are a few ways that they can work. The first is that you will need to pay and then are able to claim the amount back from your insurance company, the doctor will send the bill straight to your health insurance company or you will need to apply for pre-authorization from the insurance company and the doctor will claim from the company.

Preferred Provider Network

With health insurance, you will have access to a preferred provider network of hospitals and doctors. This can also mean that the insurance company has agreements with these doctors and hospitals and they may offer treatments at a pre-determined price that is lower than average, which reduces the paperwork, saves you money and you will be less stressed.

Just Be Healthy

The biggest advantage to having health insurance is that you will benefit from improved health. Those that do not have health insurance are more likely to wait to see a doctor that those with health insurance. This usually leads to a condition getting worse and even long-term problems, which will cause large medical bills.

health insurance

Prevention is the Key

There is a number of preventative health services offered to those with health insurance and they are free. These include:

  • Cholesterol screening
  • Blood pressure screening
  • Nutritional advice
  • Various vaccines
  • HIV testing and others.

You should take advantage of these preventative health services so you can catch any issues early and get the treatment that you need before they become serious. You can also learn how to change your lifestyle and avoid future health problems.

Restore Your Health Management 

Many people that don’t have health insurance will find the cost of treatments and medications overwhelming. This results in poor health management as patients will take smaller medication dosages, skip testing or avoid surgery. This can be dangerous if there is a serious health issue or a minor health issue may grow into something more serious.

Health insurance has a number of health and financial benefits for the insured and it is vital nowadays to have some type of health plan in place so you can take care of your health, your family’s health and get the treatments that you need and catch any health issues early.

 

 

How to Save on Medical Bills

Medical bills can quickly add up, especially if you do not have any cover to help with these costs. Nowadays, you need to have medical aid or medical insurance cover. Here is how you can save on medical bills.

medical bills

Find the Best Plan

When you are looking for a health plan, don’t just go for the one that has the lowest premiums. Benefits can change each year and so can you and your family’s health. You should compile a list of the average number of doctors visit per year, dental visits, routine prescriptions and monthly premiums. Compare the plans and see what you will pay over the course of a year for these items on each plan you are considering.

Make Sure You Have a Backup Plan

If you are changing jobs and will need to wait for your new medical aid to kick in, then you should ask your old employer if it is possible to extend your policy. If this is not possible then you could get a short-term family insurance plan, which means you will never be without coverage. Many medical aids and health insurance policies will have a waiting period.

Use the Extras

Have a look at if your health plan has any extra benefits like a discount on gym membership, legal or health advice, movie tickets and so on. You are able to use these benefits so do.

The Benefits

There are health insurance and medical aid policies that offer unlimited GP visits, a certain number of GP visits or out of network doctor visits per year, so make sure you take this into account when you are choosing a plan as you will want one with great benefits so that you are always covered. Also look for chronic disease and medication cover.

Wait… Here are more ways you can save

Check Your Bills

There are times when your medical bills may contain mistakes like an incorrect billing code, account number or incomplete information, so make sure you go over your bills before you submit them to your insurance company to avoid any claims being rejected.

Your Network

You should first check whether your doctor is part of your insurance plans network before you make an appointment. If your doctor is, then your claim might be covered, but if your doctor isn’t part of the network then you will need to pay for the bill.

Have the List

Ask your insurance company for a copy of their covered prescriptions list and give this to your doctor. If your doctor knows what is on the list then they can select the best medication for you at the lowest price. If you need a referral to a specialist then take your plans preferred provider list to your appointment, so that your doctor can choose the best specialist that is covered by your plan.

Short on Cash

If you are struggling with cash, then tell your doctor or dentist as they may be able to suggest a treatment option that is less costly or they may agree to lower fees.

Are There Samples

Your doctor receives free medicine samples from pharmaceutical companies, so if you are trying a new rash cream or an antibiotic then your doctor may have enough samples to cover your treatment course.

The best way to save on medical bills is to be preventative so you can prevent having to go the doctor. Eat healthy, exercise and lead a healthy lifestyle so you can save money in the long run.

You can also try generics instead of the name brand medicines as these are just as good and are cheaper.

Keep reading for more health insurance tips

What You Need to Know Your Health Insurance

Health insurance is vital because you never know what may happen and health insurance can offer you peace of mind. Doctors, medicine and hospitals can cost a lot and you may not have this money on hand and you don’t want to go into debt. Here are some things you need to know about health insurance.

Medicines You Are Covered For

If you have a chronic illness that requires specific medications then you need to check if these are covered by your health insurance benefits or your medical aid prescribed minimum benefits. Medication can be quite costly and if you require a variety of medicines each month then you want to be sure that your health plan at least covers some of these.

health insurance

The Doctors and Hospitals You Can Visit

Health insurance providers usually have a network of doctors and hospitals that you can visit. You need to ensure that the health insurance policy you are thinking about signing up to offers a GP and a hospital in their network that is close to you. You will not want to travel in order to get healthcare that you need and you might not be able to.

Coverage for Pre-Existing Conditions

Check to see if your health insurance plan covers pre-existing conditions that you need regular medical care for. There are some providers that will offer cover for certain pre-existing conditions and others may only partially cover these.

The Procedures You Are Covered For

You never know what will happen and what procedures you may have in the future, but you may have a general expectation of some procedures you may need like having a C-section or giving birth if you plan to have kids or you may have your appendix removed if it gives you trouble. You then need to check what procedures are covered by your health insurance plan.

Medical bills can easily add up and become costly, but having a medical plan in place can help to curb these expenses and you will also be able to save money on medication, doctors’ visits and hospital trips. Health insurance is a must and you will need to compare plans so you can choose the best one for you.

 

Saving Strategies for The Christmas Season

The holiday season can actually be quite stressful with family commitments, time and perhaps travel as well as the extra financial strain. You are able to reduce the financial stress with a good plan for the holidays. Also, with a plan in place, you can reduce your holiday expenses without it feeling like you are being overly tight for Christmas.

Here are some great saving strategies for the Christmas season.

Start to Shop Earlier

Getting your Christmas shopping started earlier will help to reduce the stress of shopping as you will have more time to find the best prices. Usually, the perfect present is actually not that expensive. By starting your shopping earlier, you can spend less because you have more time and will not panic purchase.

Start a Gift Exchange

If money is tight for you then it might be a good idea to do something similar to the normal gift excahnge with your friends and family. With a gift exchange, you don’t need to give everyone in your family an individual gift, but rather draw names to see who you are buying for or give a family gift instead of individuals.

With a gift exchange with either family or at work, you can set a limit on the amount that is to be spent. This limit should be reasonable and don’t be afraid to ask for a lesser limit.

Limit Your Holiday Travelling

You should look at your other obligations during the holidays and see which ones you are able to cut back on. You could choose to do the holidays at home and then visit family at a different time of year when it is cheaper to travel or if you are going on holiday then you can see where you might be able to make cuts, but still have a good time.

If money is tight, then prioritise which aspects of the holiday celebrations are the most important to you and limit the other ones, so you can make it happen.

Wait…There are more saving strategies…

Create a Holiday Budget

Having a holiday budget will help you to stay on track. Many of us will only budget for gifts and forget about the other expenses that might be involved like travel, food, cards and decorations. You need to make a realistic Christmas budget so that you can stay true to this and include everything.

Making the switch to spend cash for the gifts will make it easier to stay on budget. This is because you will become more conscious of the money you are spending. If you use a credit card it will lead you to spend more because it is a lot easier and it doesn’t feel like real money.

Also, keep an eye out for any sales and deals, which are usually rampant during this time so you will have plenty of choices.

Plan for Next Year

You can actually start planning for next year right now. You can save money each month for Christmas and you can even start to purchase gifts throughout the year.

This type of preplanning, will mean that you are spreading your Christmas expenses throughout the year and you won’t take such a big financial hit like you do during December.

You should keep track of who you have gotten gifts for, so you do not buy them more than one gift and store these gifts in one location so you do not lose any.

By already planning for next year, you can take advantage of sales throughout the year. It is not the best idea to buy clothing items or other things that change quickly, but you can get novelty items and other things that would be good gifts.

Don’t Deviate from the Plan

Planning now will help you to save money and will also reduce the stress of the holiday season. You should speak openly with your friends, family and co-workers and come to a reasonable understanding and you might actually be doing them a favour as well.

If you find that there are some people that are not wanting to make these types of cuts over Christmas then just spend less on each gift that you need to get.

If you do find that other people are not willing to make cuts over the festive period then find a way to purchase the gifts you need to, but spend less on each item.

You need to keep your Christmas shopping comfortable to what you can afford so you are not paying off any debt or interest on the purchases for the next year.

 

Reasons to Consider Debt Consolidation for Credit Card Debt

We all use short term unsecured debt, which is in the form of credit card debt and many of us have more than one credit card. Credit cards charge interest and other fees, which makes this type of debt expensive. Here are some reasons you may want to consider consolidating your credit card debt.

Interest Rates are High

One of the main reasons why people consider consolidating their credit card debt into one card is because of interest that is being charged on their existing credit cards is too high.

The credit card industry is competitive, which means that credit card providers do not all offer the same interest rate. This means that some credit card providers offer significantly lower interest rates compared to other issuers.

If it will be financially beneficial for you to consolidate all outstanding credit card debt into one credit card debt with a lower interest rate then you should consider doing this as you will be making savings.

The Annual Fees

Credit card issuers now ask members to pay an annual usage for the credit card. This annual fee can be pricey and they can quickly add up when you have more than one credit card and have to pay numerous annual fees.

However, if you are considering to consolidate your credit card debt because of this then make sure that the credit card provider is not adding this fee somewhere else through hidden fees or a higher interest, because you may find that the overall cost of funding the debt adds up to more than just paying the annual fee on your existing credit cards.

Consolidation of Credit Cards as a Personal Loan

Many of us do not know how to budget credit card spending. We have a limit and seem to think that we need to spend all of it. However, if you spend your limit then you will be spending years trying to pay the debt back. Every month we have to make at least the minimum monthly repayment to the credit card provider. This can become highly stressful when you are trying to pay more than one minimum every month.

Due to this, a lot of people we look at consolidating their credit card debt through a personal loan, which can be paid back monthly.

A personal loan is cheaper than credit card debt, so if you believe it will take you more than a year to repay your credit card debt then a personal loan consolidation might be the answer.

Bad Credit Rating

If you have let your existing credit card debt get on top of you to the point where you are not able to make the monthly minimum repayments then your credit rating will take a hit, which means it will be harder for you in the future to get any type of credit, which could be another reason why you might want to consider debt consolidation.

They Are Paying You

The last reason why you might want to consolidate your credit card debt so you have one debt is because the credit card provider is paying you to. This might be hard to believe but the credit card industry is now so competitive, providers are now trying to get people to sign up to their card.

A credit card issuer may know that you have an existing credit card and may ask you to transfer your credit card debt balance to them and in return, they may reduce some of your debt from your outstanding balance.

However, check the interest rate and other fees on the new card before you make the switch and make sure it makes financial sense.

Wait…You might need to know this…

How to Consolidate Debt

Consolidating debt is not the right option for everyone, but it is able to improve your finances when it makes sense.

Always Do Your Research

Before you decide to consolidate and see if you qualify, you will need to know what you want to consolidate.

You will first need to check your balances and rates on your credit cards so that you are able to compare these to new options. You are able to consolidate all of your debt or just some of it.

You will then need to find what options are available to you. This can be done by filling out a simple form and then you will be able to check rates and how it will affect your credit score.

Compare the rates and decide how much you wish to consolidate. You do not need to consolidate all of your cards, but if your cards have a higher rate than the new offer then you might be able to save by combining them all.

Applying for a Personal Loan

Once you have found the option you like, then you will need to apply for the loan, verify your information and sign.

If you are applying for a personal loan to consolidate your debt then lenders will look at:

  • Your debt to income ratio
  • Your credit
  • Your payment history
  • Your lines of credit
  • Proof of employment and income proof.

Credit cards can be expensive when you have accumulated a good amount of debt. If you are struggling to pay this debt back then you can consider consolidating the debt so that it easier and cheaper to pay off your debt. You can move your outstanding debt to a new credit card or use a personal loan to consolidate your debt. Before you make any decisions read all the fine print and make sure that it is financially worthwhile to do this.

Who is LoanFinder?

Have you heard of LoanFinder? LoanFinder is an easy solution for you to borrow money online. LoanFinder offers an easy online loan application online, making borrowing money quick and simple.

With LoanFinder you can still get a loan even if you have bad credit, defaults or garnisheeing orders.

Your LoanFinder loan can be used for whatever you need it for whether it’s to help pay for your education, a vehicle, home renovations, a vacation, a wedding or anything else you may need.

LoanFinder offers a 4 in 1 plan that includes Financial Counselling Programme, Quarterly Credit Report, Legal and ID Assist and a Free Loan Finding Service.

With LoanFinder, you will have access to:

  • Loans of up to R150 000
  • A full credit report
  • Legal and ID assist
  • A financial counselling programme
  • Help to Improve your credit score
  • Monthly debt savings of up to 50%
  • Flexible repayment options from 12 to 60 months
  • Interest at 28%

With LoanFinder, you can find the loan you need for whatever you need it for.