Wealth-Coaching

Often times if you have numerous credit cards that fall behind, you’ll find yourself in a financial nightmare in as little as thirty days.  Most credit card companies charge a late fee of $30 on average if the payment doesn’t post before the due date.  They also stack another fee the day a credit limit is surpassed.  At the end of the billing cycle, if the account is not under the designated limit they will charge another over-limit fee.

When the fees are settled you could find $90 in fees sitting on your account in as little as two weeks.  When the statement is printed you must make a minimum payment that covers the fees, the interest, and the normal payment. 

If you are unable to make this payment in full, your payment could be considered late and other fees will be assessed after the due date.  If you don’t see the pattern, it’s not a good thing.

To dig out of this situation you have to have the cash on hand to pay the total amount due on the credit card as well as pay it under the limit enough to stop the fees.  This is bad enough with one card, but what if you have several in this situation?

Credit Card consolidation could be an option for you.  By closing all your accounts and consolidating them into one account you lower the fees and eliminate the negative account status on the past due or over-limit cards.

There are several ways to make this happen.  One, you could use a credit card in good standing and with enough available credit and do a balance transfer.  This should not be your first option being that your goal should be to eliminate the debt on a credit card.

Another option would be a personal loan for consolidation purposes.  Most banks and lending companies will accommodate this but keep in mind that your interest rate will be higher than normal loans but lower than your credit cards most of the time.

You could also use a consolidation service or debt management plan.  With this you would enter an agreement for a credit management service to manage the accounts and you make the payment to them and they pay the credit card companies.

In order for you to qualify for these services there is usually a minimum debt of $5,000 and you could be required to be three months behind on your payments before entering the plan.

Getting out of debt should be your goal.  There are many options out there, but the best is to save and make wise choices in spending.