Are You Considering How To Consolidate Credit Card Debt?
If you are overwhelmed and struggling to make monthly minimums on multiple credit cards it could be time to be looking for another option and that is to consolidate credit card debt. How does it work, and does it work is a question asked by many struggling with credit card debt.
You can consolidate credit card debt and take multiple payments with interest rates that may be as high as 18 and 20% and roll them over into a single monthly payment to one agency. The interest rate will be lower, fees, penalties on multiple credit cards tend to put the consumer who is embattled over the edge, and these are eliminated when they consolidate their credit card debt.
Who Should Not Consolidate Credit Card Debt?
If you no longer have a regular monthly income sufficient to repay the debt consolidation amount, it will not do much good to consolidate credit card debt. If you continue to use credit cards and mount up more debt, well the results will be more overwhelming debt.
If you can easily make your monthly minimums and are not worried about credit card debt then no, it is not for you. Unfortunately, fewer and fewer Americans fall into this category.
When You Consolidate Credit Card Debt What Happens?
You make one payment to a single service at a much lower interest rate and help if necessary with the monthly budget. Late fees, over limit penalties and other unnecessary costs stop accruing. When you consolidate credit card debt, you are working positively to avoid bankruptcy and salvage your credit. The company helping you to consolidate credit card debt, can also offer you resources which will help you evaluate your monthly income and to remain within it.
If you elect to use a creditor funded Consumer Credit Counseling service they will work with you to help eliminate fees, and may even recommend you consolidate your payments sending them in one payment to the company and they then disburse the payments to the individual creditors.
On the other hand, some consumers choose to consolidate credit card debt by taking out a loan where the credit card debt is repaid and they then pay only one amount each month. This can result in a quick save to credit and many thousands of dollars saved in interest at credit card rates.
When it comes to options available to consolidate credit card debt there is no single answer that is right for every individual and in some cases, consolidation is not the answer, debt settlement may be the best way. It requires a close look at the individual's situation and then some tough decisions.
On the other hand, doing nothing will not make the credit card debt situation better, like most things it is best faced before it gets out of hand and the individual is facing bankruptcy.
In every case, continued credit card spending is inadvisable and almost every company will recommend you quit using your credit cards until you are debt free and can breathe easy again.