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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

What is a Credit Builder Loan and Where Do I Get One?

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Your credit score plays an important role in your financial life. If you have good credit you can qualify for loans and borrow money at lower interest rates. If you don’t have a credit score or have poor credit, it can be hard to get loans and you’ll be forced to pay higher rates when you do qualify.

Building credit can be like a chicken and egg problem. If you have no credit or bad credit, you’ll have trouble getting a loan. At the same time, you need to get a loan so you have an opportunity to build credit.

 

What Is a Credit Builder Loan?

A credit builder loan is a special type of loan designed to help people who have poor or no credit improve their credit score.

In many ways, credit builder loans are less like loans and more like forced savings plans. When you get a credit builder loan, the lender places the money in a bank account that you can’t access. You then start receiving a monthly bill for the loan. As you make those payments, the lender reports that information to the credit bureaus, helping you build up a payment history. This improves your credit score.

Once you finish the payment plan, the lender will release the bank account to you and stop sending bills.

In the end, you’ll wind up with slightly less money than you paid overall, due to fees and interest charges. For example, let’s say you get a credit builder loan for $1,000, the lender may make you make a monthly payment of $90 each month for a year. After the year ends, you’ll get the $1,000 from the lender, but may pay $1,080 overall.

Why Get a Credit Builder Loan?

The main reason to get a credit builder loan is right in the name: They help you build your credit. If you don’t have any credit history or if you’ve damaged your credit by missing payments, it’s much easier to qualify for a credit builder loan than a traditional loan from a lender.

The companies offering credit builder loans take on almost no risk because they don’t give you the money until you’ve finished paying the loan, so they’re willing to approve people who have severely damaged credit.

Credit builder loans will help you build your credit history if you make your monthly payments, but you do have to pay fees and interest to do so. There are other ways to build credit that don’t require paying any money. For example, if you get a fee-free credit card and pay your balance in full each month, you’ll build credit without paying any interest or fees.

This makes credit builder loans best for people who have tried and failed to qualify for other loans and credit cards.

There is also some value in the forced savings provided by credit builder loans, but the interest and fees eat away at that savings. If saving is your goal, it’s best to use a different strategy to help you save, but if you want to save and build credit at the same time, a credit builder loan might be worth using.

Where to Find Credit Builder Loans?

There are many companies that offer credit builder loans. Each lender offers different loan terms, fees, and interest rates.

One of the top credit builder loan providers is Self. The company offers credit builder loans with payment plans as low as $25 per month, making it easy for almost anyone to afford a credit builder loan.

With Self, you can also qualify for a Visa credit card after you’ve made at least 3 payments on your credit builder loan and made $100 of progress toward paying off the loan. You can set your own credit limit, up toward the total amount of progress you’ve made on the loan.

The card doesn’t have any additional upfront costs and can help you gain experience with using a credit card. It can also help you build your credit by giving you another account to make payments on, providing you with more opportunities to build a good payment history.

Visit Self or read the full Self Review

What to Look for?

When you’re looking for credit builder loans, there are a few factors to consider.

The first thing to think about is the monthly payment. The point of a credit builder loan is to show the credit bureaus that you can make regular payments on your debts, which will help build your credit score. If a lender’s minimum payment is more than you can afford each month, you won’t be able to build your credit with that lender’s credit builder loan.

It’s also important to think about the cost of the loan. Credit builder loans often come with stiff fees and you also have to pay interest on the money you’ve borrowed, even if you don’t get access to it until you pay the loan off.

The fewer fees and the less interest you have to pay, the better. You should look very carefully at each lender’s fee structure to choose the best deal.

Finally, take some time to see how easy it is to qualify. While credit builder loans are targeted at people with bad credit, some lenders will still check your credit history and might deny your application.

If you have very bad credit, you might want to look for a lender that advertises credit builder loans with no credit check.

Alternatives to a Credit Builder Loan

Credit builder loans can be a good way to build credit for some people, but they come with interest charges and fees. There are other ways you can build credit worth considering. Some of them won’t cost any money, which may make them a better choice than a credit builder loan.

Secured Credit Cards

A secured credit card is a special type of credit card that is much easier to qualify for than a typical card.

With a secured card, you have to provide a security deposit when you open the account. The credit limit of your card will usually be equal to the deposit you provide. For example, if you want a $200 credit limit, you’ll have to give the card issuer $200 as collateral.

Because you give the lender cash to secure the card, it’s much easier to qualify for a secured credit card. The lender assumes almost no risk. Once you get the card, it works like any other credit card. You can use it to spend up to your credit limit and you’ll get a bill each month. If you pay the bill on time, you can build credit.

Many secured cards charge high interest rates and have hefty fees, but there are some fee-free options available. One great secured card is the Discover it Secured Credit Card, which has no annual fee and offers cash back rewards.

Become an Authorized User

Most credit card issuers let cardholders add other people as authorized users on their accounts. Authorized users get their own cards and can use them to spend money just like the main cardholder.

Some issuers will report account information to the credit reports of both the main cardholder and any authorized users. If you know someone that is willing to make you an authorized user on their credit card account, this may help you build your credit so you can qualify for a card of your own.

Not every issuer will report information to authorized users’ credit reports. It’s also worth keeping in mind that if you become an authorized user on a card and the cardholder stops making payments or racks up a huge balance, that will show up on your report as well, damaging your credit further. That can make this strategy risky.

Personal Loans with a Cosigner

Personal loans are highly flexible loans that you can use for almost any reason. If you need to borrow money, you can try to find someone who is willing to cosign on the loan. Having a cosigner can make it easier to qualify, even if you have poor credit, giving you a chance to build your credit score.

When someone cosigns on a loan, they’re promising to take responsibility for your debt if you stop making payments. Lenders will look at both your credit and your cosigner’s credit when you apply, so having a cosigner with strong credit can help you get the loan or reduce the interest rate of the loan.

Keep in mind that your cosigner is putting themselves at risk by cosigning on a loan. It’s even more important that you make your payments every month. If you don’t, your cosigner will have to pick up the slack.

Personal Loans without a Cosigner

Even if you have poor credit, you may be able to qualify for a personal loan designed for people that don’t have strong credit. Just keep in mind that you’ll have to pay higher fees and interest rates to compensate for your poor credit score.

If you’re looking for a personal loan and have poor credit, shopping around for the best deal becomes even more important. You can use a loan comparison site, like Fiona, to get quotes from multiple lenders so you can find the cheapest loan.

Related: Best Emergency Loans for Bad Credit

What Is the Difference Between a Credit-Builder Loan and a Personal Loan?

A personal loan is a type of loan that you can get for almost any reason, such as consolidating debts, starting a home improvement project, paying an unexpected bill, or even going on vacation. They’re offered by many lenders and banks.

A credit builder loan is less a loan and more a forced saving plan. When you get a credit builder loan, the lender doesn’t actually give you any money. Instead, it places the amount you’re borrowing in an account you can’t access. Once you finish paying the loan, the lender releases the money in that account to you.

Credit builder loans tend to be much easier to qualify for than personal loans because the lender doesn’t have to take on much risk. They’re mostly used by people who want to build or rebuild their credit score.

On the other hand, personal loans are less popular for building credit and more useful for providing funding when borrowers need cash to cover an expense.

Related: Best Prepaid Credit Cards That Build Credit

Pros and Cons of a Credit Builder Loan

Before applying for a credit builder loan, consider these pros and cons.

Pros

  • Easy to qualify for
  • Helps you build savings
  • Payments are usually small
  • Helps you build payment history

Cons

  • Not really a loan
  • Fees and interest rates can be high
  • There are cheaper alternatives to build credit

FAQs

These are some of the most frequently asked questions about credit builder loans.

Like most loans, it is possible to repay a credit builder loan ahead of schedule, but there are a few downsides to consider. One is that many lenders add an early repayment fee to their loans, so you’ll have to pay that fee if you want to get out of the credit builder loan. The other is that repaying the loan early somewhat defeats the purpose. Each monthly payment you make toward the loan helps you build your credit. If you pay the loan off early, you’ll make fewer monthly payments, which means less improvement in your credit.

Missing a payment on a credit builder loan is like missing a payment on any loan. You’ll likely owe a late fee and it will damage your credit. This is one of the reasons it’s important to make sure you can afford the monthly payment before signing up for a credit builder loan. If you can’t make your payments, the loan will wind up damaging your credit instead of helping it.

Final Thoughts

Credit builder loans can be a good way to build or rebuild your credit, but they’re not your only option. They often involve paying fees and interest, so you should search around for the best deal or look for cheaper (or free) alternatives, such as secured credit cards.



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How to lower your credit card interest rate and save money

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Why pay high interest on your credit cards when you can simply bargain a lower rate? These tips can help you save big money on your bill.

CHARLOTTE, N.C. — A lot of people have struggled to pay their bills during the COVID-19 pandemic and many have turned to credit cards so they can kick the can down the road. Now the time has come to pay it down and some of the bills are eye-popping. 

Did you know you can bargain that interest rate down and save quite a bit of money?

You could ask for a lower rate, but according to a new study, you can bargain down 10 percentage points. So, if your interest rate is 24%, it could mean paying 14% instead. That’s still high but it’s a lot better than 24% interest. 

These numbers are staggering and can be a bit overwhelming. Americans have an average credit card balance of $5,300, totaling $807 billion across 506 million credit card accounts. Why are these numbers important? Because they want to keep you spending, which means you have leverage to bargain.

“It is absolutely possible to negotiate your rate down. In fact, your chances of doing so are better than you think they are. Close to 80% surveyed said they did just that,” Matt Schultz, an industry expert with LendingTree, said. “You can save serious money, especially if your balance is bigger.”

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You have to try, and you have to keep trying, even if the lender says no. Take it higher to a manager and keep pushing. Drops of 10% are possible and that could save you hundreds, or maybe even thousands, of dollars. 

RELATED: VERIFY: Can your stimulus check be seized by banks or private debt collectors?

“So, a lot of people have bad credit, some are thankful to have it at all. Is it possible for them too? Yes, absolutely it’s possible,” Schultz said. “Credit card companies are willing to talk with you because they want to keep your business. It benefits them to lower your rate to keep their card in your wallet.”

Paying down debt is liberating. Less debt is more buying power but you must advocate for yourself. If you don’t, the card companies are just as happy to take your money at the higher rate. 


LendingTree offers these suggestions if you plan to ask for a lower rate: 

How to ask for a lower APR

Before you make the call, come armed with ammunition in the form of other offers you’ve seen at a site like LendingTree.com or that you may have received in your snail mail. Take that offer and use it to frame the conversation: 

“I’ve been a good customer of yours for a long time and I like my card. However, the APR is 25% and I’ve just been offered one with a 19% APR. Would you be able to match it?” 

As survey data shows, they’ll likely be willing to work with you, at least to some degree.

RELATED: ‘ I was very grateful’ | WCNC Charlotte breaks through red tape to help woman get money she was owed

How to ask for a waived annual fee

Before you make the call, think about what you will accept. If you ask for a fee to be waived altogether and they only offer to reduce it, is that good enough? What if they offer you extra rewards points or miles or make some other counteroffer instead of a reduced fee? And perhaps most important, what if they say no? 

As with many negotiations, you have more leverage if you’re willing to walk away, so that could be an option. However, you shouldn’t make that threat unless you’re willing to follow through with it, and you shouldn’t follow through with it unless you’ve thought about what that would mean for your credit.

How to ask for a waived late fee

Just pick up the phone and be polite. If you’re a long-time customer with good credit and this is your first offense, the odds are in your favor. In fact, some card issuers will even waive a first late fee as a matter of policy. If you’ve been late multiple times in the recent past, however, your chances probably aren’t as good. Even so, it never hurts to ask.

How to ask for a higher credit limit

Start with a number in mind based on your current limit. The average increase reported in our survey was about $1,500, but your situation will vary. If your current limit is $500, a $1,500 bump might be asking too much. However, if your current limit is $5,000, that request might be just fine. 

Think about why you’re asking for the increase — for some extra spending power or to help your credit score — and then decide what to ask for. Just remember that it’s always better to start a negotiation by asking for a little too much. That way, when you negotiate, you can give a little bit and still get what you want.


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Can A Moving Loan Help Your Relocation? Find Out Here – Forbes Advisor

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Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Whether you’re relocating to another city or state, moving can be expensive. You might need money to pay for a moving van or movers, new furniture or your security deposit. If you don’t have money on hand to cover those expenses, a moving loan can help you fill in the gap.

Before you take out a relocation loan, learn what they are and how to compare your options to understand if it’s a good choice for your situation.

What Is a Moving Loan?

A moving loan—also referred to as a relocation loan—is an unsecured personal loan you can use to help cover your moving expenses. Unsecured loans don’t require you to use a personal asset to secure the loan. Because the loan is unsecured, lenders base your eligibility on factors like your credit score, income and debt-to-income (DTI) ratio. Like with other types of personal loans, you’ll have to repay your loan through fixed monthly installments.

When Should You Get a Moving Loan?

Although the answer varies based on your financial circumstances, it may make sense to get a moving loan if you can secure a good interest rate and can afford to repay the loan as promised. However, if you believe it might be hard for you to repay the loan, then it’s probably a good idea to avoid taking one out. Falling behind on payments can damage your credit score, making it harder for you to qualify for future loans.

How to Get a Moving Loan

  1. Search for lenders: To find lenders that offer relocation loans, search for the best personal loans online. A good place to start might be a lender comparison website. While there, carefully review the terms, minimum credit score requirements, fees and annual percentage range (APR) range of each lender. In addition, you can check with your local bank or credit union to see if it offers personal loans for moving.
  2. Prequalify with multiple lenders: Once you narrow down your list of the best lenders, prequalify with each one of them (if available). This allows you to see what terms and APR you might receive if approved. Make sure the lender does a soft credit check to protect your credit score from any pitfalls.
  3. Determine the amount you need to borrow: Estimate your moving or relocation expenses to see how large of a loan you need to take out. Different lenders have different minimum loan amounts. Also, some states have rules about the minimum amount you can borrow, which may affect the size of your loan.
  4. Apply for your moving loan: After you select the lender that matches your needs, complete the application process. Prepare to provide the lender with personal information, such as your income, date of birth and Social Security number (SSN). Some lenders will require you to provide W2’s, pay stubs or bank statements to confirm your income.
  5. Wait for the lender to make a loan decision: After you apply, wait for the lender to review your application. Some lenders might approve you within seconds, while others may take longer. If a lender denies your loan, ask them for an explanation. Applying with a co-borrower or co-signer, improving your credit score, reviewing your credit report for errors or requesting a smaller amount may improve your chances of approval.
  6. Sign the loan agreement and receive funds: Once approved, the lender will send you a loan agreement to sign. After you sign the agreement, the lender will most likely deposit your funds directly into your account. The time of funding varies for different lenders—some lenders can issue the funds the same day while others may take a week or longer.
  7. Repay your loan: Finally, repay your loan as promised. Making late payments or defaulting on the loan can damage your credit score. Setting up autopay is one way to ensure you’ll never miss a payment.

Pros of Moving Loans

  • Quick access to funds: If your loan application is approved, some lenders may deposit your funds into your bank account the same day or within a week.
  • Flexible loan terms: Some lenders allow you to take out personal loans for moving with loan terms as short as 12 months and as long as 84 months. A long-term loan may have a lower minimum monthly payment, which might better suit your budget. However, the downside is that you’ll pay more in interest over the life of the loan.
  • Lower interest rates than credit cards: The average interest rates for personal loans are usually lower than those for credit cards. If you have a good credit score (at least 670) and a stable income, you may be able to secure a good interest rate—an interest rate that’s lower than the national average.
  • No collateral required: Since loans for moving typically require no collateral—an asset that secures the loan—you won’t have to worry about a lender taking your asset (at least without a court’s permission).

Cons of Moving Loans

  • Fees: Some lenders charge origination fees between 1% and 8%—these fees can be a huge drawback since the lender usually subtracts them from your loan amount. Other common personal loan fees include application fees, returned check fees, late payment fees and prepayment fees.
  • Potentially high interest rates: If you have less-than-stellar credit or minimal credit history, your lender may charge you high interest rates. Some lenders have APRs above 30%.
  • Missed payments can damage your credit score: If you miss a payment or default on the loan, it can damage your credit score. This will make it more difficult for you to qualify for future loans.

Moving Loan Alternatives

If you want to avoid the potential cons of a relocation loan, consider these alternative options to help cover your moving expenses or rent.

0% APR Credit Card

Borrowers with good to excellent credit scores (at least 670) can avoid paying interest and high fees with a 0% APR credit card. These cards come with interest-free promotion periods, which can last for up to 21 months. If you pay off your balance before the promotion period expires, you won’t have to worry about paying interest. However, providers will charge interest on unpaid balances once the introductory period ends.

Family Loan

Family loans are another way to avoid paying interest or to pay minimal interest when it comes to your relocation expenses. With this option, you can also avoid the formal loan application process. The loan agreement between you and the family member should spell out the terms and conditions of the loan. Repay the loan as promised to avoid causing damage to your relationship.

Payday Alternative Loan

If you can’t qualify for a relocation loan or have trouble finding moving loans for bad credit, consider using a payday alternative loan. Some federal credit unions offer these loans, which are designed to help you avoid the high-interest charges of payday loans. You can borrow up to $2,000; loan terms range from one to 12 months and the maximum interest rate is 28%. To use this option, you must be a member of a federal credit union or be eligible for membership.

Savings

Instead of using a personal loan for moving, it might be better to use your savings, if possible. If you know how much it will cost, then create an automatic savings plan to cover most or all of your relocation expenses.

Relocation Package

If you’re moving for a new job, ask your new employer if it will cover some of your relocation expenses. Some employers offer this to employees as an incentive to accept the job offer. Even if the employer doesn’t offer this, you can ask for a relocation bonus or try negotiating a higher salary.

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