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» Credit Card Consolidation: Does it Make Sense?

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Credit Card Consolidation

Credit Card Consolidation

With everyone living in a consumer age it is not surprising that personal debt has spiraled. As the need for more credit grows, with many often choosing numerous avenues in which to borrow; juggling all the monthly payments has become difficult. It is now easy to lose track of what you owe and when, and to becomes stuck in financial hardship. Credit card consolidation can potentially calm the stormy waters and give you one monthly payment to keep track of. However, does credit card consolidation make sense to the average consumer?

If you have more than one credit card and are becoming bogged down by high interest rates, then by using credit card consolidation services you can lower the interest and bring all your payments under one banner. It is often the case that this new monthly payment is less than the sum of the lone credit cards. This option of using one credit card to in essence house all your others is now common practice in achieving credit card consolidation, and is a good way to keep track of your monthly outgoings while still having a line of credit available to you.

Another way to consolidate your credit card debt is to take out a personal or home equity loan to cover the outstanding monies that are owed. This method is slightly more fraught with danger because to make it work you will need a low interest loan, and in turn a good credit rating. A loan will allow you to pay off all the outstanding credit accounts and then simply pay the monthly repayment on the loan. This is only viable if you can find a loan where the monthly repayments are less than your current outgoings.

The only way to truly get on top of your credit card debt is to be disciplined. Whether you try credit card consolidation or just continue on your current path, managing your debt in a prudent fashion is a must. Trying credit card consolidation to only become complacent and go back to old ways will lead you right back to square one. As wonderful a solution as consolidation seems it is estimated that more than 50% of people who seek credit card consolidation end up in even more debt within three years.

Using a low interest credit card or loan is a good option if you can get it, but it is likely that if you are in debt lenders will be reluctant to offer you a good deal. And while consolidating your debt can help you achieve a better credit rating in the long term, it is still a requirement to have a good rating when trying to get a good loan or low interest credit card.

Credit card consolidation then only works if the way you use credit is changed. It is a good option for those wanting to move away from debt and who are aiming for a good credit rating. With there being an ever rising increase in consumers who are falling into debt, the debt management industry is a fast growing sector. As such there are hundreds of credit card consolidation services available to those looking to manage their debt more efficiently.

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