Would it really save me money if I use a loan to consolidate my credit card debts?
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You certainly can save money if you get a loan to consolidate your credit card debt. If you are a homeowner and are able to refinance your home loan, the rate of interest is usually much lower than the rate of interest on credit cards. This is also the same as having all of your payments bound into one.
You can also consider a debt consolidation loan, which is like a personal loan that is used to pay off your debts. Again, you have a single payment for everything because you've used the loan to pay off those debts.
If you have very many cards and you are paying a minimum payment on each one each month, not only will you be able to pay off all of the credit card accounts, you will only have one monthly payment. You will be able to save the money you are spending on the extra monthly payments. If possible, add at least half of the saved amount to the amount of your new loan payment so you can pay it off sooner.
If you are able to consolidate the credit card debt, the first thing you will need to do is to destroy your credit cards. If you feel that you need to keep a credit card, then choose to open a credit card account for a secured card. You will need to make an initial payment equivalent to the amount of the credit limit. The card provider will put that money into a savings account to use as a payment in case of default. The card is the same as a regular credit card.
However, you cannot go over the limit. Make sure that you pay the card payments on time and keep the account current. You may also wish to consider prepaid cards, which allow you to spend what you deposit onto the card. But these accounts don't have any impact on your credit.
You may still have some negative information on the credit file from your late payments, but you credit file will begin to look better because you will not be adding more negative information. And you will be able to start working on reducing your indebtedness. If you are able to start a savings account and make regular deposits, that will also help you to look better to a credit provider if you have to have an a loan in the future.
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