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#1 Way to Consolidate Credit Cards Onto One Card (2020)

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American consumers have taken on a growing amount of credit card debt in the years since the Great Recession. Many who see this trend as unsustainable are looking to consolidate credit cards onto one card in an effort to reduce the total debt they carry, not to mention the amount they pay each year in interest.

A recent study found consumers have an average of four credit cards with a combined balance of nearly $6,200, which costs an average of $1,162 annually in interest. If you’re one of the millions of consumers with a mountain of debt spread across multiple cards, consolidating that debt into a single payment probably sounds pretty good.

Among the ways to consolidate credit card debt are using balance transfer credit cards and debt consolidation loans. However, of your available choices, the easiest and most effective way is to transfer your card balances to a single card with a low or even 0% interest rate.

Balance Transfer Cards | Loan Consolidation | FAQs

It may seem counterintuitive but getting another credit card might be the best way to pay off credit card debt. Of course, it must be the right card, one that’s specifically designed for transferring the balances from other high-interest credit cards.

Balance transfer credit cards usually have an introductory interest rate period, many at 0% APR, that lasts for as long as 18 months. Here are our selections for the best balance transfer cards to consolidate credit card debt.

0% BALANCE TRANSFER RATING

★★★★★

5.0

  • INTRO OFFER: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.
  • Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Redeem cash back any amount, any time. Rewards never expire.
  • 100% U.S. based customer service.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.

0% for 6 months

0% for 18 months

13.49% – 24.49% Variable

$0

Good/Excellent

The Discover it® Balance Transfer card isn’t so much a card itself, but rather a feature added to some of Discover’s most popular reward cards. With this feature, you can choose among cash back, travel, or other reward cards, and take advantage of a 0% introductory rate on balance transfers and purchases.

It’s a great way to pay down other card balances and still end up with a desirable rewards card. A 3% introductory balance transfer fee will apply initially, followed by a 5% fee for future transfers. There’s no annual fee for any of Discover’s credit cards.

0% BALANCE TRANSFER RATING

★★★★★

4.8

  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 – 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5
  • No annual fee
  • No minimum to redeem for cash back

0% Intro APR on Purchases 15 months

0% Intro APR on Balance Transfers 15 months

16.49% – 25.24% Variable

$0

Good/Excellent

The Chase Freedom Unlimited® card combines some premium features that make it not just a great balance transfer card, but a great all-around rewards card. First is the introductory 0% rate on both balance transfers and purchases. Next is the unlimited 1.5% cash back on every purchase.

And, finally, is a signup bonus for meeting a minimum spending requirement within the first three months. There’s no annual fee for the Chase Freedom Unlimited® card, however, a 3% balance transfer fee applies for transfers within the first 60 days, increasing to a 5% fee after that.

0% BALANCE TRANSFER RATING

★★★★★

4.8

  • One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase, every day
  • No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won’t expire for the life of the account and there’s no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 15.49%-25.49% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 15.49%-25.49% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • Pay no annual fee or foreign transaction fees

0% for 15 months

0% for 15 months

15.49% – 25.49% (Variable)

$0

Excellent, Good

The Capital One® Quicksilver® Cash Rewards Credit Card is one of the best combination cards out there for balance transfers, cash back rewards, and a nice signup bonus. This unique card offers an intro 0% rate on balance transfers and purchases with a flat balance transfer rate of 3% for the entire introductory rate period.

You can transfer a balance at any time during the initial promotional period and get the 0% rate. Plus you’ll earn 1.5% cash back on all purchases, and a potential cash reward bonus for meeting a minimum spending requirement in the first three months. All this, and it comes with no annual fee. Of course, you do need good to excellent credit to qualify for the Capital One® Quicksilver® card.

You May Find a Card without a Balance Transfer Fee from a Credit Union

In addition to the cards on this list, many credit unions offer balance transfer credit cards with 0% introductory rates, some of which charge no balance transfer fee. Other credit union balance transfer cards have fixed low interest rates designed for longer-term debt consolidation.

If you’re not a member already, you can check this credit union locator for the ones that serve your community.

If you have too much debt to fit on a single card or if your credit score doesn’t let you qualify for a good balance transfer offer, your next best option may be a debt consolidation loan. Debt consolidation loans have the advantage of offering a fixed APR that is usually less than what a standard credit card charges.

Getting a loan to pay off high-interest credit card debt can help several ways, including reducing your monthly payments, helping you pay down debt faster, and improving your credit score by lowering your overall credit utilization rate. Here are some types of debt consolidation loans you may want to consider.

Home Equity Loans

A home equity loan lets you borrow money against the value of your home, that is assuming your home is worth more than what you owe on any mortgage you have. Of course, using a home equity loan for debt consolidation has both positive and negative aspects  — some of them obvious, and others that you may not have considered.

Among the advantages of a home equity loan over a personal loan are a generally lower APR, a longer repayment period, and the potential tax deduction that can further lower the effective rate you pay. LendingTree is one such provider of home equity loans that we recommend.

  • Find lenders for new home purchases, refinancing, home equity loans, and reverse mortgages
  • Lenders compete for your business
  • Offers in minutes
  • Receive up to 5 loan offers and select the right one for you
  • Founded in 1996
  • Over $250 billion in closed loan transactions

On the surface, the advantages of a home equity loan may seem overwhelmingly positive, but let’s consider why they deserve a little more scrutiny.

Having more time to repay debt — in the case of a home equity loan, as much as five to 30 years — can add a lot to the total cumulative interest you pay. Be sure you don’t end up paying more interest in the long run.

For example, if you can pay off your credit card debt in two years vs. transferring it to a five-year home equity loan, the added interest cost may not be worth it.

Now for the primary and obvious disadvantage of this type of loan — the risk of losing your home if you default. Because your home is collateral for a home equity loan, failure to repay can result in forfeiture of the asset.

By comparison, defaulting on credit card debt is bad, but won’t result in you being homeless.

Personal Loans

Getting a personal loan to consolidate debt on multiple credit cards is an option to consider. But the APR on this type of loan can vary greatly depending on the lender. The rate you’ll pay is also directly tied to your credit score, the type of lender you choose, and the length of the loan.

Personal loans, also called signature loans, require no collateral. Because of this, interest rates on these loans can vary widely.

The following lending networks may approve you for a loan large enough to pay off your credit card debt at a lower interest rate than what you’re currently being charged.

  • Loans from $500 to $10,000
  • All credit types accepted
  • Receive a loan decision in minutes
  • Get funds directly to your bank account
  • Use the loan for any purpose
  • Loan amounts range from $500 to $5,000
  • Experienced provider established in 1998
  • Compare quotes from a network of lenders
  • Flexible credit requirements
  • Easy online application & 5-minute approval
  • Funding in as few as 24 hours
  • Loan amounts range from $500 to $35,000
  • All credit types welcome to apply
  • Lending partners in all 50 states
  • Loans can be used for anything
  • Fast online approval
  • Funding in as few as 24 hours

Banks and credit unions tend to offer the lowest rates, but they also have the strictest loan qualification requirements. Online lenders and lender networks offer a wider variety of loans for different credit types but may charge higher interest rates.

According to the Federal Reserve Bank of St. Louis, the average finance rate for a 24-month personal loan at a commercial bank is just over 10%. That compares with an average credit card interest rate in the U.S. north of 15%. So, providing you have good to excellent credit, a personal loan can save you quite a bit in interest charges.

But what if your credit isn’t among the top tier? How much can you expect to pay for a personal loan if you have to look outside the traditional bank lending environment?

Avg Loan APRs

Online lenders can charge rates of up to 35.99% for those with bad credit, but the average APR you can expect will likely be near or slightly less than that of a credit card.

401(k) Loans

If you currently participate in a 401(k) employer-sponsored retirement plan, you may be able to borrow from your account to consolidate and pay off debt. However, just because this is an option, doesn’t mean it’s the best choice for a loan.

Pros and Cons of 401k Loans

If you make the decision to borrow from your 401(k), you must be aware of the plan’s many rules and restrictions. Borrowing even a small amount from your 401(k) can greatly reduce what you’ll have available for use in retirement.

First, the amount you are legally able to borrow can’t exceed 50% of your total vested account, up to a maximum of $50,000. Also, the loan must be repaid through payroll deductions over a maximum of five years.

There are also restrictions and caveats that involve eligibility, such as if you leave your job or want to transfer your 401(k) to an IRA. This can mean you must repay the loan in full or pay an early withdrawal penalty.

The argument in favor of taking out a 401(k) loan is that the interest rate is often very low. The interest rate calculation varies by plan administrator but tends to be something just above the Prime Rate.

Also, whatever interest you pay goes directly back into your account, helping to offset some of the compound gains you’re losing by withdrawing funds.

If you’re carrying a balance on multiple credit cards, it’s a good bet you’re paying more in interest than you need to. You can save a bundle by transferring those balances onto a single card with a low or even zero interest rate.

But can you really consolidate all of that debt onto a single card? In a word, yes.

Credit card offers with 0% interest rates on balance transfers are designed to help you consolidate debt from multiple cards. However, you need to ask some questions when deciding whether to go this route:

  1. How much total debt will I be consolidating, and will the credit limit of the new card cover it? Depending on factors like your credit utilization ratio, credit score, and the number of cards you have, the credit limit you receive may not allow you to transfer all of your debt to the new card. In this case, choose the balances with the highest interest rates to consolidate first.
  2. How long is the introductory rate period? Most 0% introductory offers are good for at least 12 months, and some extend as long as 21 months. Be sure you know the terms of the card you’re applying for. Also, pay attention to the rate you will pay after the intro period, as some of them charge a very high standard APR.
  3. Is there a balance transfer fee, and how will it impact what I pay? Most balance transfer cards charge a one-time 3% fee to transfer a balance. That means $30 for every $1,000 you transfer. Be sure to include this fee when calculating whether this is the right choice for you.

Consolidating the balance from multiple credit cards onto a single card can be a good financial choice, as long as it’s done the right way. Be sure you can pay off the transferred balance within the introductory rate period.

Also, carefully consider the details of the card you plan to get and shop around for the longest intro-rate period and lowest balance transfer fees you can find.

Taking charge of your financial life by consolidating credit card debt is seldom a bad thing. But the method you use can have a big impact on your credit score.

One way your score can take a hit depends on what you do after being approved for a balance transfer card. When you consolidate existing credit card debt onto a new balance transfer card, don’t cancel your old credit cards.

Doing so can have the effect of driving up your credit utilization rate, which accounts for 30% of your FICO score. This rate is calculated by dividing your overall credit card balance by the available credit you have. Closing your old cards will lower your available credit.Example of Balance Transfer Impact to Utilization Rate

Another way your credit score could potentially be hurt involves an unintended consequence of debt consolidation. If you transfer high-interest balances to a new low-interest card, it may feel like a fresh start.

All of those cards that now have a zero balance may start begging to be used… don’t do it! Debt consolidation only works if it’s part of a plan to curb spending and actually pay down the amount you owe.

The benefits to your credit score when consolidating credit card debt the right way far outweigh any potential harm. By paying off cards, reducing your overall debt, and actively monitoring your spending, you’ll likely find your credit score increasing rather than dropping.

At the risk of sounding simplistic, the smartest way to consolidate credit card or any debt is the way that works best for you.

For some, that could mean getting a balance transfer card with a high enough credit limit and a long introductory rate period. For others, a debt consolidation loan might be the best choice. Whichever route you decide is best, having a plan and executing it is crucial.

Consider the amount you owe, the amount you’re paying in interest on what you owe, and the amount you can pay each month toward the balance of what you owe. Any choice you make for a credit card or loan to consolidate your debt should be based on these three factors.

Remember that consolidating and beginning to pay down your debt is just the first step — you also need to take control of your spending. It makes no sense to reduce your debt at the same time you are taking on more. Make a budget and stick to it.

Debt consolidation, whether done with a balance transfer credit card, a low-interest personal loan, a home equity or other type of loan, should be seen as a means to an end. The ultimate goal is to reduce your debt and the amount you’re paying in interest.

American consumers have taken on an increasing amount of debt in the years following the economic recovery. However, consumer debt can’t continue to grow unrestrained.

For those who see credit card debt as an unnecessary drain on their hard-earned resources, consider paying off debt by consolidating onto a single low-interest credit card or loan. It’s one of the best ways to ensure you’re prepared for whatever the economy brings.



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Bad Credit

3 mortgage refinancing options for those with bad credit

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Does a low score mean limited options? (iStock)

Record-low interest rates are dominating the news cycle and homeowners, in particular, are jumping to refinance. Data from the Mortgage Bankers Association puts current refinance activity at 98% higher this year than last year, even amid a global pandemic.

Those with low credit shouldn’t skip rate shopping either as there are still options available in today’s low-rate environment — even for those with the thinnest credit profiles.

Mortgage rates vary by lender. Many non-traditional lenders take other factors into consideration outside of credit score, like earning potential and steady work history. While some of these lenders do advertise their qualification criteria, many borrowers may not happen upon them unless they actively shop for refinance rates and offers.

These days, borrowers can quickly explore their mortgage refinance options by visiting Credible, which allows loan seekers to compare both rates and lenders in one place.

1. Look at FHA loans

FHA loans aren’t just for first-time buyers with small down payments. The benefit to doing an FHA refinance is that this option, backed by the Federal Housing Administration, does consider borrowers with sub-600 credit scores who hold less than 20% equity in the home. In fact, only those with less than 20% are eligible for an FHA refinance.

There’s even better news for those with existing FHA loans. With the newer FHA Streamline Refinance product, borrowers can refinance without an appraisal and with lower out-of-pocket costs, saving both time and money.

HOW TO REFINANCE YOUR MORTGAGE

2. Explore VA loans (if you qualify)

Veterans receive many benefits for their service to our country, and one of those is access to mortgage loans backed by the government via the Veterans Administration (VA). Not only are these loans offered at some of the lowest interest rates available, but they also benefit current and past service members regardless of their credit.

Those with current VA loans can also consider refinancing through the VA with the Interest Rate Reduction Refinance Loan program. The IRRRL program is similar to the FHA Streamline Refinance product in that it does not require hefty out-of-pocket closing costs or an appraisal.

If you’re interested in finding the lowest interest rates around, however, you should consider using a multi-lender marketplace like Credible. Credible allows you to compare rates and lenders to ensure you find the best deal.

HOW TO GET THE LOWEST MORTGAGE REFINANCE RATES

3. Opt for cash-out refinance

A cash-out refinance may make the most sense for those with low credit due to a large amount of high-interest debt. Leveraging a cash-out refinance turns home equity into a liquid asset, which borrowers can then use to pay off outstanding debts. Additionally, refinancing to a lower interest rate will save money on the repayment. With current credit card interest rates above 17%, and cash-out refinance rates at 3.194% APR for a 30-year fixed option, this refinance option makes financial sense for those battling to get out from under their debt.

You can visit Credible to get pre-qualified for such a loan and to shop around for loan options among different mortgage lenders. By providing some basic information, you can find out if approval for a loan is likely and can see what rate you’d pay so you can determine if a mortgage refinance loan is affordable.

IS NOW A GOOD TIME TO REFINANCE YOUR MORTGAGE?

What are today’s mortgage rates?

It’s important when shopping for a mortgage refinance to keep an eye on interest rate changes week to week as even a small increase adds up to thousands saved on interest. Again, Credible is a great place to shop. You can compare rates and complete the entire mortgage refinance application process online. Find your rate today.

HOW REFINANCING YOUR MORTGAGE CAN PUT MONEY BACK IN YOUR POCKET

As of the time of writing, (the week November 19th) the current interest rates are:

  • 30-year fixed-rate refinance average: 2.75%.

In the month prior (Week of October 19th), the average 30-year fixed-rate refinance was much higher at 3.16%.

To illustrate the difference, let’s look at the numbers. A consumer refinances a $300,000 loan at 3.2% in October pays over $167,000 in lifetime interest. Another consumer who waits a month and refinances $300,000 at a slightly lower rate of 2.8% percent will pay just $143,000 in interest over the life of the loan.

The bottom line

Don’t let a bad credit score keep you away from the significant savings to be had with today’s low interest rates. While lower credit may not qualify you for the best rates available, depending on when you refinanced and your credit score at the time, refinancing now could still be a big financial win.

To start, investigate refinance options by shopping with multiple lenders to see potential rates, and then input those figures into a mortgage refinance calculator to visualize savings.

Finding the best mortgage refinance rates takes time. You’ll need to compare rates from multiple lenders. Credible allows you to compare multiple lenders to ensure you meet your personal finance goals. Find out how much you could save on your loan amount by refinancing now.

HOW TO FIND THE BEST MORTGAGE RATES AND FASTEST CLOSINGS

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Can I Cancel My Full Coverage Car Insurance?

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While you’re financing a vehicle, you must maintain full coverage auto insurance – it’s not required by your state, but by your lender. If you don’t have a loan, you still need to meet your state’s minimum insurance requirements to legally drive your car on the road. Here’s what you need to know about full coverage insurance, and your choice in the matter.

Auto Loans and Full Coverage Car Insurance

Financing a vehicle means you borrow money from a lender, and then you pay them back in installments. Until you completely pay off the auto loan, the lender has ownership rights to the car. They’re listed on the vehicle’s title as a “lienholder,” and it gives them rights to repossess it if you stop paying or break the loan contract.

One of the requirements of an auto loan contract is that you have full coverage car insurance until you pay off the vehicle. Since the car is technically the lender’s, they can, and do, require that the vehicle is covered to the fullest extent.

If you cancel your full coverage auto insurance while you’re financing, you’re breaking terms of your loan contract. The insurance company generally contacts your lienholder right away and lets them know that the insurance coverage has lapsed.

Your lender can then put what’s called “force-placed” coverage, and add the cost of it to your monthly loan payment. It’s typically more expensive than if you were to choose the insurance for yourself, since the lender isn’t going to shop for the cheapest rates out there – you’re the one footing the bill – because they just want the car covered.

If you refuse to pay for the force-placed coverage, or you can’t afford it, then the lender hires a recovery company to repossess your vehicle. Your other option is to reinstate your previous full coverage that you canceled, or find another insurance plan that meets your lender’s requirements. Contact your lender to see what their insurance requirements are and what you need to do to remove force-placed coverage.

Types of Auto Insurance Coverage

If you’re not financing, then you can simply opt for personal liability and property damage (PLPD) coverage if you choose. This is usually the most basic level of insurance coverage offered by insurance companies, and it’s required to carry this coverage to drive your car on the road in nearly every state.

Can I Cancel My Full Coverage Auto Insurance?Full coverage is defined as a combination of comprehensive, collision, and liability insurance.

  • Comprehensive – Can cover damage from “perils” such as fire, theft, vandalism, or other single accidents not involving another driver, and carries a deductible.
  • Collision – Covers your vehicle in the event of an accident with another driver, regardless of who’s at fault, and carries a deductible.
  • Liability – Covers bodily injury and property damage if you’re in an accident and you’re at fault. This is the most basic level coverage that’s required in nearly every state.

The consequences of not carrying any sort of auto insurance on your car are usually hefty fines, and possibly other serious long-lasting repercussions. Not having auto insurance could lead to a misdemeanor or even a suspension of your license depending on your home state.

Check with your state’s minimum car insurance requirements so you can be sure that your insurance plan is up to snuff.

Car Insurance Too Expensive? Consider a Different Car!

The price of your auto insurance is also dependent on what vehicle you’re driving. Newer cars are usually more expensive to insure because they have more bells and whistles that are costly to insure and fix.

Used vehicles are typically less expensive, but it also depends on the make and model. Some cars are more desirable than others, which can make some vehicles a higher risk for theft. Your credit score can even be a factor in your auto insurance costs in many states.

If your car is too expensive to insure, then consider getting another vehicle. Sometimes, though, getting into an auto loan can be hard if your credit score isn’t the best. Instead of searching all over town for dealerships that can work with your credit, let us help at Auto Credit Express.

We’ve produced a nationwide network of dealers that are teamed up with bad credit car lenders, so let us look for a dealership for you in your local area. Fill out our free auto loan request form to begin the search for your next vehicle.

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Mark McCown: Eviction is different under land contract – The Tribune

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Dear Lawyer Mark: I have had my old house for sale with realtors for almost two years now, but it still hasn’t sold.

I had a few people look at it, and even make offers, but none of them can get a bank loan because of their bad credit.

I don’t want it to keep sitting empty, but sure as heck don’t want to rent it out and have someone tear it up.

One of the people who had bad credit asked me if I would sell it to him on a land contract.

I’m really thinking about doing it, but need to know what all needs to be in the land contract.

I also want to make sure that he is right when he told me that if he didn’t pay, I can just evict him like a rental agreement.

Is that correct? — WORRIED IN WINDSOR

Dear Worried: Chapter 5313 of the Ohio Revised Code governs land contracts.

Under its sections, the contracts must be executed in duplicate, and must contain at least 16 particular provisions.

Some of those are obvious, such as the sellers and buyer names and addresses (referred to as the vendors and vendees for a land contract), and some not so obvious, such as a “statement of any pending order of any public agency against the property.”

The land contract must also include the legal description of the property, sale price, interest rates, payments due dates, whether there are any other charges, as well as who is to pay for the property taxes, and whether there is a mortgage owed, among other items.

Even though it is not technically required, other provisions should go into the land contract as well, such as who is responsible for maintaining property insurance, and who the beneficiary of any insurance claims would be.

This can be extremely important, for example, if there were a fire that didn’t totally destroy the premises, but the buyer wants to stay.

Who gets the money from the insurance company — the seller for the purchase price, or the buyer for the damage to what will be his house?

Your prospective vendee is partially correct in stating that you can evict him like a rental.

If he is 30 days late on the payment, and the scenario below does not apply, you can evict him and cancel the land contract in a court case fairly quickly, if you follow the correct procedures.

If you do this, you cannot sue him for missed payments, unless he paid less than the fair rental value of the property.

However, under RC Section 5313.07, if a buyer has paid more than 20 percent of the purchase price or has paid on the contract for more than five years, the seller can only get possession of the land by bringing foreclosure proceedings.

This means you would have to bring a lawsuit against him, get a judgment in the lawsuit, and then have the property sold at a sheriff’s sale after advertising the sale, just as a bank would do in a foreclosure.

You can only recover up to the amount still owed to you on the property, with the excess proceeds from the sale going to the buyer.

Thought for the Week: “I have the simplest tastes. I am always satisfied with the best.” Oscar Wilde

It’s The Law is written by attorney Mark K. McCown in response to legal questions received by him. If you have a question, please forward it to Mark K. McCown, 311 Park Avenue, Ironton, Ohio 45638, or e-mail it to him at LawyerMark@yahoo.com. The right to condense and/or edit all questions is reserved.

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