Whether you have maxed out several credit cards because you are a student, trying it make it until graduation, or the head of your family, trying to provide the basics, consolidated credit cards seems like a great idea. Most people consolidate debts just for the ease in making payments. Some do it to take several high interest rate credit card accounts and consolidate into one lower credit card with low interest rates. Sounds really good, but is it? Here is some information that you need to take into consideration before you make this decision.
If your purpose in consolidating is to make it easier on yourself when it comes to bill paying time, that
There are those who do not endorse debt consolidation as method of debt elimination. This perhaps is due to a narrow view of the method and being open to the idea that debt consolidation can be beneficial or a bad idea depending on how it’s done. Those that hold this position only look at one method it can be done and for some reason refuses to look at other possibilities.
As I said, there are ways that debt consolidation cab be a very good and help you be debt free quicker. The method of consolidation that I cannot endorse or would not recommend, is one which leaves you open to the possibility of future complications or putting you a more difficult position than you find yourself now.
This includes rolling current credit card debt from various high interest cards to a new low interest or zero interest card. Why? Because this leaves you vulnerable to future interest hikes and other fees that are at the whim of the credit card issuer. This activity has been somewhat reduced by the new credit card act of 2010, however this new law only requires the issuer to give you a certain amount of time before they can increase both and fees considerable. In fact any method of debt elimination that leaves you in position of uncertainty is not good. It solves your problem temporarily but leaves you with considerable risk.
The method of debt consolidation that is beneficial is the one in which the fees are lowered or completely gone and the interest is fixed for the duration of the loans and cannot be raised nor new fees imposed. This type of loan could result from home equity loan or unsecured loan that has a better rate then you are currently paying. The result one payment instead of many, which means that you are less likely to miss or be late on a payment and therefore your credit score, should improve. The nice is that since you have a lower payment the money saved each moth can now be applied to reduce your principal balance giving you the opportunity to be debt free quicker.
As with any debt elimination method if it is done correctly and carefully it can have enormous advantages. Done incorrectly it can have negative consequences. That’s why professional help of someone experienced in the particular debt elimination method you choose. Those that are negative any of the debt elimination methods do not contemplate all the possibilities and benefits. You should be keep an open mind, study and consult with someone before making any decision on which method you will use to become debt free.
Debt consolidation is a legitimate debt relief tactic however there are other debt relief options that might make more financial sense for your current situation. It would be wise to talk with a debt relief specialist that will be able to provide their professional opinions on your current situation.
Check out the following link to get a free debt relief consultation from a financial specialist in your area:
www.debtreductionacademy.com – Find out about debt consolidation and if it is a good way to wipe out credit card debt. Will it help you get out of debt faster? Video Rating: 0 / 5
I have good credit, I am able to pay my bills, but I am finding it impossible to get a debt consolidation loan from a credible bank. My credit card APRs are rediculous so I am looking towards other areans of personal loan consolidation. What do I have to lose? I’m a little weary about this Cash Call service, but I NEED to consolidate my credit cards, otherwise I will literally never pay them off. For example, I owe 1400 on a card with a 31% APR. Has anyone used Cash Call and have good experiences? The only thing I am really concerned over is that it isn’t a fixed loan and they say they have the right to increase the interest without warning. But if I make all my payments, it should be ok, i would hope. Any experiences would help. Thanks.
My husband is in financial dire straits, We are living in hawaii and cost of living is expensive here. Would consulting a debt relief company and them helping out affect his credit score? Does anyone know of one that is helpful and understanding? If anyone is wondering how we got in this situation, He got divorced and the ex wife is getting alimony, house, car, on top of that Recent taxes has shown we owe money to govt. plus our cost of living. I am already working and helping out but not enough. Dont know how else to approach this. I know if you ask for a consolidation at bank this will affect your credit score. Thanks for any good advice.
hi had great credit at one time i need a personal loan do not have good credit have the ability to repay but not the credit to borrow is there anyone out there who lends money based on your ability to repay need a debt consolidation loan looking to borrow about 20,000.00 dollars thanks
I have a solid job ($150k+ annually), good home equity ($200k+), but a lot of debt and falling credit scores. If I could consolidate $50k in debt with a reasonable loan I should be good. Any ideas?
I am very desperate to come on here and talk about my financial situation. I need approx. $20,000 to consolidate credit card debt… I do not have enough equity in my home (just bought it last year), I have tried personal loans through Capital One and Chase and have been denied. With Capitol, I even had my father co-sign (he’s got excellent credit) and it didn’t work. I have NO WHERE ELSE TO TURN. I need help, if anyone knows a forgiving lender who will look at my situation, or any other way for me to reach my goal, PLEASE let me know. Please do not refer me to a credit counseling program, for I don’t use my cards anymore, I just have been paying on them for 3 years and trying to speed up things. I know I could just keep paying the most I have on one card and work them down, but I am looking for debt consolidation OPTIONS. Like a bank or organization that would help. Thank you so much for your time in advance!
