A first step to strengthening your finances is to simplify your lines of credit
Credit cards are an incredibly convenient and readily available line of finance, but unless you’re managing your money effectively, they can quickly spiral out of control – leaving you with a lot of debt and being charged a high rate of interest.
If you’re wanting to simplify your finances, reduce your interest costs, or improve your credit rating, then a good place to start is to consider consolidating all of your current credit card facilities into a single account.
Through this process, you can either consolidate your existing lending into a single credit card account, or you could close all of your credit cards and consolidate into a personal loan.
Both of these options give you the benefit of simplifying your repayments so that you only have one repayment to make, and you’ll be able to reduce the amount that you owe.
If you’re considering restructuring your finances or credit card consolidation, you should seek independent financial advice to work out what will work best for you.
Here’s five steps that you may want to consider:
Check your credit score
When thinking about the structure of your finances, an important first step is to check your credit score. This will highlight any issues that you need to address and give you a sense of the underlying strength of your financial position. If you are applying for credit or a loan with any financial institutions, they will be checking your credit score to see if you are a sound credit risk.
Do your research
Investigate what options are available to you. Talk to your current bank or financial services provider, compare their products to their competitors, assess who will be able to give you the best deal in terms of fees and interest rates.
Some financial institutions will offer specific consolidation products – this is probably going to be the best fit for what you’re looking for.
Should you be looking at a personal loan?
A personal loan is an effective way of bringing existing lines of credit together, and giving you a roadmap on how to pay the debt down.
If a personal loan isn’t available to you, you may need to consider some sort of debt management arrangement.
Manage your other obligations
Review your overall financial position, consider your assets and liabilities and look at how you can make savings in your day-to-day expenditure to reduce your reliance on credit or finance.
Start rebuilding your credit history
If you’ve damaged your credit score, it can take a long time to get things back on track. The important thing is start demonstrating sound financial management as soon as possible – ensure that you are meeting your obligations, paying your debts and repayments on time, and proving to potential lenders that you are a sound financial risk.