Home > Debt Consolidation >
Credit Card Debt Consolidation > Credit Card Debt Consolidation: Maintain The Discipline
Credit Card Debt Consolidation: Maintain The Discipline |
|
Is it wrong for a Christian to consolidate
credit card debt by using a Credit Card Debt Consolidation loan? The answer is no, not necessarily. But there are some inherent problems that must be dealt with before a Credit Card Debt Consolidation loan is advisable. Basically, Credit Card Debt Consolidation loans can make sense, but never as a first step in resolving credit card debt problems. Credit card debt consolidation loans are designed to help people pay off bills and pay down debt. A typical credit card debt consolidation loan requires security or a co-signer. Although credit card debt consolidation loans are usually simple interest loans (interest calculated on an annual basis) with typical interest often ranging from 22%-24% or more, it is often less than the accumulated finance charges of the consolidated debts, which are usually based on compounded interest (interest on the interest that accumulates daily). In addition, most credit card debt consolidation loans offer lower monthly payments spread over a longer period of time. Proceed with Caution! What tends to happen to most that obtain credit card debt consolidation loans is that by paying off their bills, they no longer receive large monthly bills from retailers and credit card companies. They begin to feel like they do not owe as much money as they did before tend to stop worrying once the supposed solution has been found. Therefore, they start to use one or two credit cards, and before long owe several hundred dollars in addition to their credit card debt consolidation loan. However, they must resist the urge to splurge. Unless the problems that created the need for a credit card debt consolidation loan (usually overspending) are corrected, they should not consider obtaining a credit card debt consolidation loan. Otherwise a year or so later all the little bills will be back again, and when they are combined with the credit card debt consolidation loan, the situation will be worse than it was before the credit card debt consolidation loan. Get On A Budget No one should consider a credit card debt consolidation loan until they have been living for six months on a budget that controls spending. During those six months, the five following steps should be followed to eliminate as much debt as possible. If these steps are faithfully executed, a credit card debt consolidation loan may not be necessary. --Transfer ownership of every possession to God (Psalms 8:6, Deuteronomy 5:32-33). --Give the Lord His part, the tithe, from your gross salary, first (Malachi 3:10, Proverbs 3:9-10). --Allow no more debt, including bank and personal loans, and cut-up the credit cards if unable to pay them off each month (Proverbs 24:3). --Develop a realistic balanced budget that will allow every creditor to receive as much as possible (Proverbs 16:9). --Start retiring the debt (Psalms 37:21, Proverbs 3:27-28), beginning with the high interest debt first. If all of them are high interest, pay the one with the smallest balance, first. Once the smallest is paid off, put all the money on the next, and so on. Generally speaking, if these steps are followed, the average family will be debt free in less than five years and the problem that caused the debt in the first place could very well have been corrected. Then once the overspending has been brought under control and if there is still unmanageable debt, it may make sense to substitute one large loan in a reduced interest rate for several smaller ones at higher rates. Where To Get A Credit Card Debt Consolidation Loan If you feel that you resolved your overspending problem and still need to consider a credit card debt consolidation loan, there are several places to obtain a credit card debt consolidation loan other than a home equity loan: --The cash value of an insurance policy. --Bank loans using in-bank deposits as pledged collateral. --Credit unions against in-bank deposit in the credit union. --Family loans or gifts. --Retirement account withdrawals or loans (borrowing from an IRA is not allowed). Credit card debt consolidation loans can at times be beneficial. However, the key to success with a credit card debt consolidation loan is discipline. Once someone has consolidated his credit card debts, he must maintain the discipline it takes to stop spending with credit card. If he can't, he will often end up in deeper debt than before. |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
