Consolidating credit card debt affect on credit rating
Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns.
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But for those who qualify, they’re worth considering as a way to eliminate toxic debt.
If you have good credit and you’re paying an above-average interest rate, you might be able to get a lower interest rate on a consolidation loan.
High interest rates don’t help, and almost half the people we surveyed are paying interest rates higher than the average, which the Federal Reserve pegs at 14.99%.
In some cases, you might be able to negotiate your interest rate, but credit card issuers aren’t always cooperative.
Your credit utilization is calculated by dividing each credit card’s balance by its credit limit.
That’s an average of ,732 per household, based on current census data.
But if you consistently carry a balance, it can threaten your financial well-being.
For example, 58% of the people we surveyed have had at least ,000 on their credit cards for more than a year, and 43% have more than ,000 in credit card debt.
Find out why so many people are hesitant to try consolidation and get some tips on how to pay down your credit card debt faster.
We surveyed more than 1,000 people with more than ,000 in credit card debt and found the following: If you pay off your credit card balances every month, you don’t need to consolidate your debt.
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Forty-eight percent of the people we surveyed have never tried to consolidate their credit card debt.