Article by Marjorie Salada

Are you looking for the best method for consolidating credit card debt? While debt consolidation loans can get you out of debt, do they really make the best method of resolving your debt? There are a few reasons why this kind of loan may not be a good thing. Debt consolidation loans were commonly used as a debt relief method in years gone by, but financial experts have changed their thinking on the value of debt consolidation loans for getting out of debt.

Debt consolidation loans are not easy to get at the current time. Banks are very hesitant to loan money, even to individuals with perfect credit. The big problem with these loans is if you default on your payments, this type of debt consolidation loan could lead to foreclosure proceedings since it is secured with your home. In the past, the worst thing that could happen for nonpayment of credit cards was bothersome collection calls and possibly garnishment of wages, but you did not have to be concerned about losing your home.

The second issue that arises with debt consolidation loans is the availability of credit on your newly paid off credit cards. When you transfer you credit card balances from your credit cards to your debt consolidation loan, you will have hundreds of dollars of available credit ready to be used. Unfortunately, within a year many people will use this credit again. Now they will have credit card payments and a loan payment.

Credit counseling is another debt relief option that does not require home ownership, a loan or good credit. Your interest rates will be lowered and your unsecured bills can be consolidated through the use of a credit debt counseling company. You cannot charge on accounts that have been placed in this debt consolidation plan. But if you are still charging, getting out of debt will be hard. In less than five years you can be debt free by placing your unsecured debts in a debt management program.

Debt counseling is a safer method of getting out of debt, but in order to remain debt free you will have to make changes in your lifestyle and how you manage your money. Educate yourself on financial issues. Getting out of debt is just one part of the big picture. Debt is not easy to manage and can creep up on you, but you can become debt free with discipline and persistence. You can get a free, no obligation quote today for debt freedom.

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Everyone has been in this situation. You have credit cards and you just go too far with them. Further then you can actually handle financially. Let’s face it; they are quick, fast and available. As with anything quick, fast and available, after the enjoyment has passed, the trouble comes. In the case of credit cards that trouble comes in the form of mounting bills with what seems like never-ending interest charges and fees. This leads to a mountain of debt and unpaid minimum charges, which in turn lead to a bad credit history, something no one ever wants to have.

This is one of the reasons the economy is so bad today-people got a lot of credit they just were not able to pay. Instead of filing for bankruptcy, you have another option. This option is to consolidate credit card bills and to consolidate bills in general. It is better for you and your credit history; and it is better for the economy as well.

If you decide to consolidate credit card bills or consolidate bills in general, here is what you can expect as a customer. You must go see a counsellor/consultant about this option and they will help you to consolidate credit cards so you can get out of debt fast. Before they do this, they will ask of you something’s.

First, they are going to want to know just how far in the hole you are. They will write down every bit of debt you have accumulated and total it up for you. You might be shocked to find out the full value of your debt load. Secondly, they are going to tell you to stop generating more debt! They can’t help you if you run out there and go on another shopping spree or get a new big screen TV. After all, you can only help those who help themselves.

Thirdly, they are going to ask you to list all sources of income that you may have. They will ask you if there’s a way for you to increase your income so you’ll have more money to help pay off the principle debt load. This may mean you will have to take a second job or at least a part time job on the side.

Fourth, once you have stopped gaining more debt and have your income figured out, they will then set down with your creditors and negotiate with them, by telling them that you will have to file bankruptcy if you cannot consolidate. Then they will, generally, consolidate credit cards with a deal that pleases you, the customer, and them, the creditors. With this you will hopefully have a greatly reduced interest rates and fees. After this is all settled away, you will HAVE to pay that one monthly consolidated bill every month. This will greatly help fix your bad credit history and relieve a lot of stress on you by only having to worry about paying one bill every month.

I have about $19,000 worth of debt,one is a primeline home equity line of credit for $13,100 with an interest rate of 10%.I can only pay the interest right now and that is alot.
Two quick cash accounts for $1,200 total with an interest rate of 18% each.And a car payment of $3675.00 with only a year and a half to pay on it. My question is. Should I try to consolidate with my own credit union or should I go to a credit consolidation company ? I am not late with any of my payments,so paying them is not a problem. I just want to get out of debt a little faster Thanks for any answers..
Thank you for your answers, I have solved my problem with my own bank.I incorporated the smaller, but higher interest rate loans, Quick cash, 18% interest, with my lower rate car loan and extended the payments for 5 years at a lower monthly payment at $130 a month.That is $80.00 a month less leaving me more money to finally start paying the principal on the Prime line, Plus I am picking up more hours at work .more$$$
Also the consolidation companies do not work with secured loans anyway, Mostly credit cards, I talked to alot of them today.

Me and my husband have been married for 8 years. We have 1 son, and I am pregnant with twin girls that are due in late november.

We completed a partial DITY move (for those of you who are civilian DITY=Do It Yourself). We’re expecting about $4500.00 back after taxes. I want to use all of the DITY move money, to pay off some bills that we have. Paying them off will free up about $400.00 a month. My husband just wants to pay only part of them off, and save the rest for a down payment for a new car for me and our kids.

Our 1 months advance pay is going to be paid off in September, and that will free up $189.00 a month. The loan with the Navy Marine Corp Relief Society, will be paid off in March, and that will free up another $110.00 a month. My husbands credit card with Capital One will be paid off next February, with our tax return. The rest of our tax return is going to help pay off his Military Star Card.

I have to admit we’re careless, and put ourselves into a lot of debt. We’ve been slowly been digging ourselves out. My husband is deploying to Bahrain next March. He will be receiving per diem, while he’s deployed. He lives very frugally while on deployment. We have agreed that with the excess per diem money, I want him to apply that to our consolidation loan, and his military star card. We can be 100% debt free by the beginning of next summer.

I am doing medical billing and coding from home. I completed my first month, and I made $1200.00 (after taxes). 80% of it is going toward the new car. The rest we’re using for our monthly household expenses.

So what should we do with the DITY move money? Should we immediately pay off some bills (my idea) or should we only pay off part of them, and save the rest for a down payment for a new car?

P.S. I did forget to mention that we do have a small amount of money in a separate account for “just in case” money. There is about $1100 in there right now.

This forum has been really helpful in the past.
I might not use the advice always but I always appreciate the feedback.
Here’s the scoop- I currently have $55,000 in Credit card debt.
It is totally stressing me out and it is really dificult to keep up with the payments.
1-Shoud I us a debt consolidation ageny. I spoke with them and they claim they can greatly reduce the interest and thus the monthly payments- but you do need to pay them a fee. Also, the payments are still close to what I pay now but I can get the cards paid off in 5 years instead of 17 years.

2-Should I get a home equity Loan.

3- should I use my saving to pay this off- I have about $95,000 in the bank.

Thanks for the advise!!!

Hello All,
I’m trying to roll up my outstanding unsecured debt (about $25k) into 1 payment per month at a lower interest rate than what my current avg. interest rate is (19%). I gross about $6k a month as an analyst with a utility company and get paid monthly. I have a credit score around 630, I rent an apt. and I’m financing my car. I’m paying close to $1,500 a month towards my unsecured debt, a small % is going towards the actual principals. The payments are due on various dates each month (which I’ve already moved some bill cycle dates) which has caused me to be late or miss payments altogether. Ultimately my goals are to have 1 payment (close to my pay date), have a larger % of the payments go towards the principal at a better interest rate, lower my payment to around the $650-$800 range per month & improve my credit score. I think the only hope I have is to try & get a loan with a co-applicant/ co-signer.
With that being said, does anyone have any suggestions on a route to take?

Thinking about a HELOC for debt consolidation. Good idea or not?

I have really bad credit, I am in debt and I already have a home equity loan.. where can I go for help?? I want to avoid bankruptcy. Please help.

Is there way to consolidate my credit card bills and get a lower payment without affecting my credit?

Should I go to a debt consolidation company or work it out amongst myself?