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Debt Consolidation An Efficient Way To Evade The Travel Debt

Debt Consolidation An Efficient Way To Evade The Travel Debt

It seems that use if credit cards and travel during holidays are synonymous. Travellers often opt for the credit cards to finance their expenses that are associated with the travel, There are also travel credit cards available that specifically aim for travelling purposes be it for booking the tickets for your hotel or paying the fair for airline or likewise. Few even also opt for personal loans to cover the various expenses that are part of the trip. However, in a recent survey it has been stated that majority of the people opt for credit cards when it comes to covering the expenses of the trip.

Use of credit card

A number of reasons are associated with the rise in the popularity in the rise of use of credit cards for travelling purposes. First there are few credit cards available that are specifically that have various discounts attached to the same, so travellers can get high discount on the various expenses. Another advantage of the credit card is that you can avoid various transaction fees and few of these also provide reward points and complementary insurance for travels. You can also ward of various other fees with the use of these credit cards.

Reasons for debt

When on holiday, it is very tempting to overspend under various heads and that leads to debt lag that often leaves a mark on the financial condition and also the credit score. After returning from your travel, if you find that a long list of bills awaits you then do not get worried rather opt for consolidation of the debt to one. Often you will notice that of the outstanding amount, much is against the fee for foreign transactions or the charges that have been deducted for the withdrawal of money from the ATM. If you fail to take immediate steps then there are also chances of accumulating interest on the same.

Opt for consolidation

There is also another way to reduce the debt that you have accumulated on your credit card that is through balance transfer. That is transferring the debt to a credit card that has a low crate of interest. However, for doing so, you need to assess the annual rate of interest that is levied in the new card. But debt consolidation can also be a good option as this will turn your existing loan to a new one. The best thing about this process is that a number of debts can be consolidated to one.

Steps of consolidation

This process has proved to be a beneficial especially for the unsecured debts. For this, you can speak to the credit counselors who can help you to consolidate the debt. They can speak to the multiple lenders and then negotiate with them so that the total amount can be reduced to one that the borrowers need to pay only one consolidated amount at a lower rate of interest. Often this amount is even lower than the original amount. Borrowers have to pay this amount in different monthly installments. It is important for them to stick to the payment plan so that you can get rid of the debt at the earliest.

Calculate monthly budget

For this process, it is important to have a well laid budget that includes your monthly income and detailed account of the monthly expenses. The credit counselors calculate the amount that you need to pay based on your monthly budget. Credit score is also considered prior to the consolidation process. To avoid this process, you can set a different savings account for the travel purpose. You can tag this account with the main account so that you can enable regular transfer of funds.

Author Bio: Mark Butler has undertaken trip lately and after the same he had few debts that had accumulated after the same. He opted for debt consolidation and to know more about the same you can click here.

 

Written by theadventuremonkey

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