The second type of debt consolidation you may hear about are debt management plans offered by debt settlement companies.With these programs, the debt settlement company may be able to secure lower monthly payments with your creditors by negotiating a reduced balance on your accounts.You can then choose to pay 0% for a longer period of time – the balance transfer period – or for a shorter period, but with no transfer fee.
Most cards have a few minimum criteria you need to meet before getting the card, but it’s important to realise that even if you meet the criteria you may not get the card.
One of the key factors determining whether you will be accepted for the advertised credit card is your credit history, otherwise known as your credit report or score.
Even though the debt consolidation company will be making payments on your behalf, you will still be responsible for ensuring those payments are made to your creditors on time.
If the debt consolidation company fails to make a payment on time, the late payment will be reflected on your credit report.
If on the other hand you may have some outstanding balance at the end of the month then a low APR card could be suitable.
Does consolidating your credit cards mean
APR, or annual percentage rate, is a great basis of comparison.
This statement may be viewed negatively by lenders who manually review your report.
Programs like this may lower your monthly bills, but because you are not re-paying the full amount owed on your accounts, your creditors will likely report those accounts as “settled” or “settled in full for less than the full balance.” Because it indicates that you did not pay the account as agreed, a status of settled on your credit report will impact your credit scores negatively, even if there are no late payments on the account.
Our tables let you compare across a range of different criteria, but the right card depends on what you want it for.
If you have a good credit rating and pay your bills on time, then a cashback or rewards card will give you extras on your spending.