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Credit Card Debt Consolidation > Credit Card Debt Consolidation: Two Ways To Get Out Of Debt!
Credit Card Debt Consolidation: Two Ways To Get Out Of Debt! |
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Basically, Credit Card Debt Consolidation can be a very attractive alternative if you're drowning in debt. The object is to combine a lot of small debts and their monthly payments that you currently pay to a multiple individual creditors into one larger debt with a single monthly installment payment that you make to a single creditor through Credit Card Debt Consolidation. And it often turns out to that the credit card debt consolidation payment is actually lower than the sum of the individual monthly installment payments. That's all there is to it. So you can combine existing debts into one larger debt, and you might actually be able to lower your total monthly payment to boot. Credit card debt consolidation sounds like a good way to help dig out from under all that debt and allow you a little breathing room as well because you've been able to lower your total monthly debt repayment outlay. Now, you can bet that this next statement is some corollary to some fundamental law of the finance industry, if it's not their mantra already, but the more beneficial something is for the consumer, the less beneficial it is for the financial institutions. And when it comes to credit card debt consolidation there are no exceptions. Since credit card debt consolidation, and the consequent lowering of your monthly payments, is not necessarily in the industry's best interest, you can be sure that they're not going to spend a lot of time coming up with ways to help you get out of debt. As a matter of fact, they go to great lengths to ensure that your remain in (their) debt. Consequently, there are only two ways you can get out of debt--well, actually there are four, but dying and winning the Lotto don't count. Consolidate Credit Card Debt with a Credit Card Debt Consolidation Loan Credit card debt consolidation loans are secured loans to pay off outstanding credit card balances. Credit card debt consolidation loans can be especially helpful to folks that meet specific criteria and disastrous to those don't. They're beneficial only if you have a large debt load you'd like to whittle away at but aren't in financial straits, meaning that you have a good, stable job or other source of income that allows you to both make the payments and maintain your standard of living. But this doesn't describe your situation, a credit card debt consolidation loan is not for you. Why? Credit card debt consolidation loans are secured loans, meaning that you have to put up some security, or collateral, to get the credit card debt consolidation loan, like your house. If you don't have a job or other income source that allows you to maintain your standard of living, you'll likely start missing the consolidation loan payments and guess what the lending institution's going to do. Yep, they're going to take back their collateral: your house. Now you're worse off than before. Credit Card Debt Consolidation Using Another Credit Card The other alternative for credit card debt consolidation is to consolidate all your existing credit card debt onto another credit card. All you need to do is accept one of those offers you get in the mail for a 0% introductory rate with fee-free balance transfers, transfer the balances from your other cards onto this new one--thus consolidating your debts--and start making payments to the new card. That's it. Oh, by the way, you're going to cut up those other zero balance credit cards aren't you? But there are traps here as well. What do you do if the credit limit on the new credit card isn't sufficient to support all your other debts? You could always transfer as many of the highest interest rate balances to the new card, as possible and then still make multiple, but fewer, monthly payments. OK, so what do you think will happen if you're late on even one of those new payments? You can bet that the 0% introductory rate is a goner and the card issuer is going to slap you with both fees and an almost usurious interest rate. You do realize that you now own yet another credit card? There's no such thing as a free lunch, especially in the credit card debt consolidation industry. |
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