How credit card debt consolidation can eliminate your anxieties

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Ryan Smith is a contributing Financial Writer, Moderator and Community Mentor of  DebtConsolidationCare. He has been an active participant in the forums wherein he offers debt consolidation advice and suggestions to people in debt problems. If you have a query on “debt consolidation or debt settlement” related issues, you can simply discuss it with him in the debt Forum.

How credit card debt consolidation can eliminate your anxieties

People who’re struggling with debt, especially credit card debt frequently come across the advice – go for credit card debt consolidation. Credit card debt consolidation is the process of combining the debts on many credit cards into one (or two) cards. This can be done either with a low-interest rate bank loan or balance transfer, which means transferring all your balances to a new credit card. Therefore, what should you do when you’re thinking about credit card debt consolidation? The most important thing that you should take into account is the APR or the Annual Percentage Rate. Regardless of any technique that you use to consolidate your cards, the Annual Percentage Rate would always be the key factor. You can essentially say it is the only criterion to search for.

Consolidating your credit cards is one of the best things that you can do for yourself. It is an ideal solution if you’re having difficulties to make multiple payments each month. It not only simplifies your budget but also helps you improve your credit rating. There are a number of reasons why you should do this and the benefits really count.

Why credit card debt consolidation?

One of the principal reasons why people consolidate their cards is that it gives them the chance to obtain better rates than they presently have. This definitely saves you money. It is wise that you explore all the rates you’re paying currently and enumerate them. Once you’re finished, take into consideration the new rates that are being offered to you. You would be amazed to find how much you can save. The end result is that you save on your interest rate and it’s simpler for you to make one payment each month rather than multiple payments.

Talk to a professional and ask questions

When you’ve made a decision to consolidate, you should consult a professional. This individual would help you in your selection but you have to ensure that this would be productive for you and make your life simpler. Let the lenders understand that you’re shopping around for the best offers and you would see they would be more than willing to help you out. You also have to ensure that there are no hidden costs for consolidating your cards. Don’t hesitate to ask questions. Exploring various lenders would help you make a wise decision and you would understand what to search for when you decide to consolidate.

You should remain cautious since the debt consolidation industry has developed significantly over the last 5-10 years and there are scam companies that always try to make the most of you. Carry out the suitable due diligence on any company you’re considering to work with and in the end you’d get a company that’s right for you.

A note from Little House: I personally have written about debt consolidation before and feel it isn’t a good option for many people. A few reasons why I feel this way include people deep in debt may not be able to make the revised payment if they were unable to keep up with the original payment. Another reason includes the fees associated with debt consolidation, contacting your creditors before signing up with a debt consolidation company is an important first step. You may be able to negotiate lower APR’s yourself. Make sure you research all of your options before resorting to debt consolidation.

2 Comments

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  1. Simple in France

    Hmm I’m always hearing about scams and trouble these days, so I haven’t recommended this on my own blog, but it’s basically what I did back when I still had debt. I was LUCKY and had 2 credit cards. I ended up playing one card off another by transferring the debt back and forth and taking advantage of some six months of 0 interest deals. . .I had them competing against each other. But these days, I keep hearing that people have had horrible experiences with this strategy–like not getting it paid off and then getting whalopped OR by having the fact that they’re changing their debt from one place to another affect their credit ratings (ouch).

    Still, it worked for me!
    .-= Simple in France´s last blog ..Sustainable, recession-proof restaurants near you? =-.

    • Little House

      @Simple in France – I agree. I tried debt consolidation myself years ago and I wasn’t successful with the program. I had to write a disclaimer at the bottom of this guest post stating my opinion. I guess it works if the person is really committed to paying off their debt.

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