credit card consolidation loan: The [CORRECT WAY] To Do It | Debt Consolidation Credit Cards

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in this video I’m going to show you

through the right way to do debt

consolidation you know there are a lot

of companies out there on the internet

vying for your highballs trying to sell

their product to you but I’m here to

tell you that if you do debt

consolidation in the wrong way you’re

likely to be still in debt and maybe

even have more debt than when you

started with make sure to stick around

all the way to the end of the video

because I’m going to share with you each

and every step you need to take to do

debt consolidation the right way let’s

get started what’s up you guys welcome

back to the channel my name is Joe on

this channel we talk about all things

personal finance that help people and

affect people like you and me the

average Joe whether that is how to

consolidate your debt the right way

whether it’s how to pay off your debt

whether it is how to budget for the very

first time how to save for your

retirement how to save for your kids

college and every single thing in

between that’s what we talked about on

this channel okay so how do we do debt

consolidation the right way it all

starts with the right mindset for the

future what is the goal what is the

purpose here it is to not just

consolidate your debt it is to get rid

of your debt and if you want to get rid

of your debt you have to start with the

very first thing that’s gonna make it

all possible and that is you must have a

budget remember in case you forgot

you’re in debt you are unlikely in

credit card debt or other types of debt

with high rates of interest which means

your day to day your monthly your annual

activities are causing you to be more in

debt each and every year and that means

we need to shift how we do things each

and every day that means having a

written budget not only that you follow

but one that’s gonna set you up for

success that’s gonna allow you to open

up some of your income each month so

that you can pay off your debt this debt

consolidation plan doesn’t work if you

aren’t paying off your debt along those

same lines besides having a written

budget you must make a commitment to

getting rid of your debt as quickly as



is not some sort of easy and just

comfortable smooth ride to getting rid

of your debt it is choppy it is focused

it is intentional get rid of it as

quickly as you can so before you even

get started make sure you take the time

set the time aside to build a written

budget that is based on your actual

income that is going to account for your

actual expenses and make sure that that

budget allows for you to be paying

hundreds if not thousands of dollars

each and every month towards your debt

the other thing you must do before you

get started is take each and every one

of your credit cards and cut them up or

torch them with a flamethrower or

destroy them as some sort of a trash

compactor I’ll I don’t care what you do

with them except you must destroy them

we are on a path of getting rid of our

debt and that means making sure we don’t

add any more debt to our lives get rid

of your credit cards you don’t have to

close the accounts if you destroy the

credit card you’re gonna win order new

cards down the road once you are in the

right place financially to use them

responsibly we are nowhere near there if

we’re talking about debt consolidation

destroy the credit cards okay so when we

talk about paying off our debt as

quickly as possible there are two main

methods that I’ve detailed in previous

videos called the debt avalanche method

and the and the debt snowball method

these methods work with the existing

accounts you already have and don’t

involve debt consolidation you can be

perfectly successful with these methods

instead of consolidating your debt so if

you want to look more into the debt

avalanche method or the debt snowball

method make sure to check out the links

in the videos in the description below

and I’ll throw up a card in the video

right now above and that will help you

walk through those steps to pay off your

debts with the accounts who already have

that being said there is a faster way to

do it that’s gonna save you even more

interest and potentially even more time

there are two main methods to do this

the first is utilizing a credit card

with a 0% interest rate and with a 0%

balance transfer fee those are two

important keys to this there’s no point

in opening up a new credit card if it

doesn’t save you interest and it charges

you a lot in fees the whole point of

doing debt consolidation is to lower

your fees and to lower your interest

rate so you want to look for a credit

card that you can get a

proved for that has low if any fees and

number two has a long period of an

initial interest rate that is 0% that’s

gonna lie to not pay monthly interest

and actually get rid of the debt as

quickly as possible there are a lot of

credit cards out there that do offer a

zero percent interest rate for the first

nine months 12 months 15 months 18

months even but there are very few

credit cards out there that offer a zero

fee balance transfer and what that is is

when you transfer a balance from a

different credit card to this new one

a lot of credit cards out there well for

that initial interest rate of 0% but

they will charge you a balance transfer

fee of around at least ten dollars if

not a full three to five percent of the

amount that’s being transferred and that

can be a large amount of money let me

show you what I mean so like I said

we’ve got number one a credit card with

0% rate and no gun balance transfer fees

think about it this way let’s say that

balance that you have is we’ll call it

$10,000 well $10,000 times was it

what is a 5% we’ll say worst case

scenario well in this case that’s what

$500 that’s a lot of money and fees

probably more than you’re gonna pay an

interest so we want to avoid cards that

are gonna have a large balance transfer

fee and so there’s only one credit card

that actually meets these requirements

that I’ve been able to find recently and

that is the Amex

American Express everyday

so the AMEX everyday credit card meet

these requirements number one it has 0%

balance transfer fee as long as it’s

done within sixty days of opening the

account that should be doable boom

second up 0% interest for 15 months it’s

pretty good not the best out there but

then again this was the only one I found

that would do the zero dollar balance

transfer fee not only that zero dollar

annual fee the Amex everyday credit card

meets all the things all the

requirements that we’re looking for it

doesn’t have very good rewards it’s like

two points for supermarkets or groceries

and one point for everything else point

is we’re not doing this for the points

we’re doing this to get rid of the

existing credit card debt that we have

definitely if you can get a proof of the

Amex everyday credit card if we’ve

already made the commitments that we’ve

made with respect to credit cards we’re

getting cutting up our existing credit

cards we are making a commitment to

paying off our debt as quickly as

possible with a written budget we’ve got

all of that in place we are committed to

getting rid of our debt first step get a

proof of the Amex every day credit card

$0 balance transfer fees balance and

transferable calls be T balance transfer

fee as long as you do it within sixty

days of opening the credit card 0%

interest rate for the first 15 months

after you open the card and $0 annual

fee that’s talking about zero zero zero

zero fees zero interest rate zero annual

fee this is the way to do it if we want

to fit as much of our existing credit

card debt on this account and then

utilize this initial 15 month period to

pay it off as quickly as possible now do

me a favor

I looked for quite a bit of time here

and I only found this card that would do

this if you found maybe a local credit

union or maybe another credit card that

meets these requirements zero dollar fee

zero dollar balance transfer fee and

zero percent interest rate for at least

say 12 months

longer and I missed it make sure to drop

a comment below let me know what that

card is and I will sort of certainly

make sure and correct myself here but I

this is the only one that I could find

and hopefully this is one that’s gonna

work for you as well two considerations

you want to think about before you

immediately put everything you have on

this card is how comfortable do you feel

like how confident are you that you can

get rid of your credit card debt during

those first 15 months because the thing

we want to avoid is paying a large

amount of interest on existing debt and

if you can’t get a good portion that

paid off in those first 15 months then

this might be a problem for you 15

months down the road now we do have a

second option here which might be a

backup planet after 15 months if you

still have existing debt there but the

point is be cognizant of the fact that

interest rate on this card isn’t is

gonna jump after 15 month is probably

gonna be close to 17 20 25 % so we want

to eliminate as much as possible if not

all of your credit card debt during

those first 15 months okay so that

second option we’re talking about is a

debt consolidation loan debt

consolidation it’s a long word loan okay

it’s a personal loan it’s not secured by

any property it’s a personal loan

unsecured and with this debt

consolidation loan we are looking to do

the same thing we were doing with the

Amex everyday credit card which is to

consolidate multiple accounts into one

specific personal loan or debt

consolidation loan with one monthly

payment hopefully paying a much lower

rate of interest than we were on those

other different types of credit cards

there’s two specific benefits we’re

looking for with this number one we want

to have one payment as opposed to

multiple payments

right so if you have three or four

credit cards right now you want to have

just one specific debt consolidation

loan payment and then number two lower

interest rate right otherwise what’s the

freaking point I guess there’s the

convenience of one payment but if we’re

not paying a low rate of interest is it

really worth it to go through this

effort I don’t know if it is so in this

case probably with you have credit card

debt you have an integrative 20 and 25

percent so the goal here is to

consolidate our debts multiple accounts

into one specific payment and with a

lower rate of interest a lot of the

companies out there that have these

personal loans these debt consolidation

loans are offering anywhere from five

point nine nine percent up to twenty or

twenty five percent so the goal here the

only reason to pull the trigger on this

is if you can get that lower rate of

interest okay so there are two specific

companies that I found in there I’m sure

there are a lot more but two that I

found that really stood out of personal

loan companies that are offering

personal loans debt consolidation loans

that are offering some pretty good deals

right now we’ve got Marcus by Goldman

Sachs and you also have the discover

personal loan as well both of these have

the offer of low interest rates fixed

interest rates and that’s the other part

of this with credit cards you have a

variable rate of interest with these

specific debt consolidation loans you

should have a lower rate of interest and

it should be a fixed rate these

companies also had no or very low fees

to open up the loan as opposed to

something like a peer-to-peer lending

company which we’ll talk about in a

second so with this we’ve got option a

would be Marcus Goldman Sachs and be it

would be discover I’m sure there are

more but these are the ones that are

pulling out here make sure to drop a

comment below if you’ve got some other

recommendations other companies you had

experience with that worked well with

consolidating your debt

Marcus bug Goldman Sachs and they

discover personal loan both of these

companies are going to offer fixed rate

no fees to open it up and rates will be

anywhere from five point nine nine

percent and depending of course on your

credit profile which we talked

extensively about in the past and odds

are if you have a lot of existing

consumer debt specifically credit card

debt you probably are not gonna get the

best interest rate if we’re being honest

here maybe you will if you have a great

on-time payment history and maybe you

have low to medium credit utilization

but it likely you’re gonna see something

above five point nine percent again you

don’t want to pull the trigger on this

unless you can get an entry that’s lower

than what you’re paying right now okay

so option number three is utilizing

peer-to-peer lending there are multiple

sites out there that offer peer-to-peer

lending where you can do good debt

consolidation loans problem with these

are you’re gonna get comfortable

interest rates may be as low as five

point nine percent but definitely much

higher than that

and they’re gonna charge those pesky

origination fees somewhere around 1% of

the amount that you’re borrowing which

can actually be a large amount of money

okay so what’s the goal with all this

the goal is to get out of debt

surprised get out of debt that’s our

goal here our goal is not to get fancy

or cute with this we want to get rid of

our debt as quickly as possible and the

reason we’re talking about debt

consolidation loans at all is because it

helps cut some of the time and the

interest out of it so remember we want

to start with written budget we’ve got

to have a written budget that we are

sticking with that we’re following that

always wins you must have a written

budget that you follow each and every

day each and every month number two we

want to start with the AMEX every day

credit-card because of that 0% annual

fee the 0% initial interest rate for 15

months as well as zero dollars in

balance transfer fees as long as done

within the first 60 months that’s the

first option we want to utilize and then

after that we want to utilize a debt

consolidation loan debt consol

companies like marcus by goldman sachs

as well as discover are gonna be great

options I’m sure there are others out

there that can get you that low fixed

interest rates compared to your credit

cards of course remember we want to get

rid of our credit card debt as quickly

as possible and utilizing a debt

consolidation loan the right way

starting with that foundation of having

that commitment to get rid of your debt

as well as utilizing a written budget is

gonna get you there

remember debt consolidation only works

if you’ve made a commitment to not get

any more debt so we’re utilizing your

credit card here but only to move our

existing debt and then attack that as

quickly as possible if you’ve not made a

commitment don’t do this because it’s

just opening up your other cards to

reuse them again there is a specific

responsible way to utilize credit cards

and obviously if we’re talking about

debt consolidation we don’t know what

that is yet so make sure that we take it

one step at a time make sure that we’re

getting rid of our debt as quickly as

possible and then once we do that once

we are good with our written budget we

are saving money each and every month we

are getting ourselves our family in a

great position financially then we can

talk about utilizing credit cards safely

responsibly to utilize those those

rewards and those benefits that they can

give us do me a favor if you have found

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