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Credit cards help you in a number of ways as long as you can manage them properly. When you accumulate debts on them, it becomes the greatest curse of your life. This is because it is quite difficult to manage several monthly payments and pay back high interest dues. In such a situation, you can take help of credit card debt consolidation to repay your multiple dues with the help of a single monthly payment.

5 Ways to consolidate credit card debts

Go through the following lines to know how to consolidate credit card bills.

1. Enrolling in a consolidation program – You can enroll yourself in a credit card debt consolidation program, wherein the consolidation company will negotiate with your creditors to reduce the interest rates on your debts. With your creditors’ approval, the company will also decide upon a single monthly payment, with the help of which you can repay your credit card dues quickly.
2. Taking out money from 401(k) – Borrowing from 401(k) plans is considered to be one of the most popular options to consolidate and repay credit card debts. However, if your employment ends before you’re able to repay the borrowed amount, then you may have to face early withdrawal penalties.
3. Obtaining a personal loan – Apart from taking out a personal loan from large financial institutions, you can consider obtaining a loan from credit unions or regional banks. It is advisable that you visit such a financial institution and explain your monetary conditions in order to take out a loan at favorable terms and conditions.
4. Taking out home equity loans – If you have enough equity in your home, then you can also take out a loan by pledging your home equity. However, assess your financial status in order to make sure that you’ll be able to repay the loan on time. Otherwise, you may lose your home if you’re not able to repay the loan within the stipulated time.
5. Borrowing the required amount – Another suitable way to repay credit card dues is to borrow the required amount from your friends or relatives. However, have a formal promissory note outlining the terms of the loan. Both the parties need to follow these terms so as to avoid misunderstandings in future.

How to prevent getting into credit card debt

Instead of searching for the available options to get rid of credit card debts, it is always better to avoid falling into the credit card debt trap. Here are 3 tips by following which you can avoid accumulating debt on your credit cards.

1. Stop using too many cards: It is very easy to accumulate debt on your credit cards when you have too many of them. This is because, it is quite difficult to keep a track of your spending and remember the due payment dates of all your cards.
2. Don’t pay only the minimum dues: When you pay only the minimum dues, you actually accumulate interest on your outstanding balance. Therefore, it increases the overall cost significantly.
3. Make payments before due dates: You need to pay late fees when you miss the due dates of your credit card payments. Therefore, it is advisable that you pay over the phone or sign up for online banking to make your payments. Even if you need to pay a processing fee, it’ll be much less in comparison to the late fees and interest hikes.

Above all, try to pay off the outstanding balance at the end of every credit card billing cycle. This is one of the best ways to avoid credit card debt.