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How to Consolidate Debt

Watch more How to Get Out of Debt videos: http://www.howcast.com/guides/30-How-to-Get-Out-of-Debt Subscribe to Howcast's YouTube Channel - http://howc.st/uLaHRS Combine your debt to minimize interest rates. Howcast uploads the highest quality how-to videos daily! Be sure to check out our playlists for guides that interest you: http://howc.st/ytmainplaylists Subscribe to Howcast's other YouTube Channels: Howcast Health Channel - http://howc.st/HOE3aY Howcast Video Games Channel - http://howc.st/tYKKrk Howcast Tech Channel - http://howc.st/rx9FwR Howcast Food Channel - http://howc.st/umBoJX Howcast Arts & Recreation Channel - http://howc.st/vmB86i Howcast Sports & Fitness Channel - http://howc.st/vKjUjm Howcast Personal Care & Style Channel - http://howc.st/vbbNt3 Howcast empowers people with engaging, useful how-to information wherever, whenever they need to know how. Emphasizing high-quality instructional videos, Howcast brings you experts who provide accurate information in easy-to-follow tutorials on everything from makeup, hairstyling, nail art design, and soccer to parkour, skateboarding, dancing, kissing, and much, much more. Step 1: Avoid debt-consolidation firms Stay clear of debt-consolidation firms. They can't do anything for you that you can't do yourself. Tip Remember: Debt-consolidation firms that advertise themselves as "nonprofit" are not necessarily free. Step 2: Call your creditors Call your credit-card companies and try to negotiate lower interest rates. Be persistent -- if they say no, ask to speak with someone else, or call back in a few weeks and ask again. Step 3: Investigate new cards Check around to see if you can get a new card with a promotional rate of six months to a year of no interest. Tip Read the small print! Don't sign up for a card that reserves the right of "no-reason rate increases" or "universal default," which means the company can raise your interest rates simply because you owe money to other creditors. Step 4: Transfer balances If your lowest-interest credit card has available credit, consider transferring other balances to that card. But do some number crunching first: Exorbitant transfer fees might make debt transfer pointless. Step 5: Apply for an unsecured loan Shop around for an unsecured debt-consolidation loan with a lower interest rate than that of your lowest-interest credit card. If you qualify for one, pay off your credit cards with the loan. Just be aware that they are nearly impossible to obtain in a tough economy. Step 6: Apply for a home-equity loan If you own a home, consider applying for a home-equity loan or line of credit; the interest you pay is often tax-deductible. Just make absolutely sure you can make the payments so you don't put your home in jeopardy. Tip Make sure the loan doesn't come with a prepayment penalty. Step 7: Stop spending! Put the brakes on unnecessary spending so you don't incur more debt while paying off what you already owe. Did You Know? The U.S. national debt reached $10 trillion on September 30, 2008.
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