Visa Gift Card Credit Card Debt Consolidation

Visa Gift Cards

A Visa Card can be a great gift, but some people may instead wish they would have simply received cash as a gift so the money can be applied directly to credit card debt. If you find yourself in the situation of having a Visa Gift Card with a generous balance in conjunction with having some credit card debt that you would like to pay off or consolidate, you may be able to utilize the gift card to reduce the credit card debt a little. In most cases you can’t use the Visa Gift Card to directly pay a credit card bill or consolidate the balance with other cards, but with a little creativity you can figure out ways to apply the money on your gift card to your credit card balances.

Debt Consolidation

Debt consolidation involves combining two or more accounts into one account. People seek out consolidation for a variety of reasons:

• To simplify and streamline their finances
• To lower the monthly payment
• To lower the interest rate
• To avoid impending term changes, such as the conclusion of a credit card’s introductory offer

If you receive a gift card equaling a similar amount of money to the balances you owe on some credit card accounts, it can be tempting to figure out a way to use the gift card balance to pay off or consolidate the accounts. Even if the gift card balance will only make a mere dent in the amount of money you owe on credit cards, it is still preferable to spending the money frivolously if you are trying to get your finances in order.

Secured Consolidation Loan

A secured consolidation loan is secured by some form of collateral. Most banks and credit unions offer secured loans which can then be used to combine several credit card accounts into one payment, usually with a lower interest rate.

If the Visa Gift Card you receive allows for cash advances you can withdraw the money from the card and place it into an interest-bearing savings account, which can in turn be used as collateral for the secured loan you will utilize for your consolidation loan. This is a viable option for people who do not want to simply apply the cash directly to the credit cards for whatever reason.

Carefully review the terms on the gift card to make sure that a substantial amount of your balance will not go toward cash advance fees if you utilize the card in this way.

Pad an Application

When you apply for a credit card debt consolidation loan the lenders look at several factors including the amount of money you have in any type of savings account. If your credit score is fair, but you do not have any money in savings, you may be able to place the money from the Visa Gift Card into a savings account. Having this savings account helps your application for a consolidation loan become more attractive and you might be able to receive a better interest rate on your consolidation loan.

More Visa Gift Card Credit Card Debt Consolidation Options

Since many Visa Gift Cards are reloadable, you can potentially use them as budgeting tools in order to work toward consolidating your credit card debt. Visa Gift Card credit card debt consolidation can be an expensive option, however, since there are sometimes hefty fees associated with prepaid credit cards especially when your intent is to pull cash out at an ATM or at a bank.

Alternatives

Instead of using a gift card directly as a consolidation tool you may want to consider using the gift card for everyday expenses and using your other money to help you along with consolidation. The trick is to find the most cost-effective way (with as few fees as possible) in which to get your credit card debt combined into one account.