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Credit Card Debt Consolidation > Don't Get Let Down With Credit Card Debt Consolidation
Don't Get Let Down With Credit Card Debt Consolidation |
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Many credit card debt consolidation companies might act as if they can make you debt-free with one swish of their magical wand. They make it appear as if compressing all your debts in one little packet and reducing the size of your debt to an unbelievably low level is a trifling matter for them. Actually, these are all dubious claims by unscrupulous companies that are merely after the money of gullible consumers who are already reeling under the burden of debt. These credit card debt consolidation companies will have you to believe that your credit card debts can be eliminated without you having to pay any more money, as they claim that the debts on your credit cards are not legal debts. These credit card debt consolidation companies will also try to convince you (for a large fee) that it is your legal right to refuse to pay your credit card debts. They might even offer to provide you with the services of so called experts that understand the laws pertaining to this "not legal" debt. However, stop and think reasonably about this whole situation. Ask yourself, If these laws in place are illegal for credit card companies to extend your credit, why are there billions of credit cards in circulation? Ask why the attention of several lawmakers has not been drawn to the "illegal debt" that credit card companies allow you to charge, and if so, why haven't they enacted any laws on this? Basically, you must realize that just because you have been reckless in your spending and can't pay off your debt now, it does not mean that you don't owe any money. There are three main credit card bad debt consolidation moves. Hard money loan: It is a myth to believe that credit card debt consolidation loans are easy to get. The very reason you need such a loan is that you have missed payments and tarnished your credit history. In such a risk scenario, the debt consolidator might promise an easy loan, but in reality you'll end up being charged higher interest rates than you're paying now. You will actually end up paying more even though your monthly payment may be lower with these loans. Second, the credit card debt consolidation companies might promise to make your life easier with lower interest rates and reduced monthly payments. All that is required from you is one easy payment. However, they incorporate their fee as part of your monthly payment to them. You can decide for yourself whether it is worth paying someone else to do what you can do on your own: negotiate lower interest rates, stretch out your repayment schedule and pay off high-interest debts first. The other important risk factor with such companies is that they are known to make late payments or even miss payments, thus exposing you to the risk of getting sued by your creditors and further tarnishing your credit records. Balance Transfer Trap: Credit card debt consolidation companies often resort to low-interest balance-transfer cards that are available so easily nowadays. However, remember that those rates only last a few months, and then you have to switch cards again. The attendant risk is that at some point, all this activity begins to show up on your credit report, and you start to look like a bad risk. If you get turned down, you could be left holding the high-interest card you were hoping to dump. Against all the above, if you own a home and have some equity in it, you have the advantage of carrying a fairly low interest rate, currently in the high single digits, and the interest you pay is tax-deductible. You can also apply for an unsecured personal loan, which you will get if your credit is good. You can also refinance your car. The best part is that you can do all this yourself. |
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