Credit Card Debt Consolidate

What Is Credit Card Debt Consolidation?

To consolidate, in its most basic terms, is to combine many small things into one big thing. So in terms of consolidating credit card debt, you take out a credit card consolidation loan from a bank, financial company, credit union, or other lending institution to pay off all of your outstanding credit card debt, combining it all into one, new “consolidated” loan owed to the new lender at a fixed, lower interest rate.

Why Consolidate Credit Card Debt?

The primary reason people pursue credit card debt consolidation is to reduce their monthly payments, and one of the key ways this is achieved is by lowering the interest rate on the credit card debt. Therefore you may want to consider a credit card consolidation loan if you can’t currently make your monthly payments on your existing credit card debt, if the term on your current, low interest rate on your credit card debt is about to expire, or if you find that, with a card consolidation credit loan, you’re eligible for a significantly lower interest rate than you’re currently paying.

What To Consider Before You Credit Card Debt Consolidate

Before applying for credit card loan consolidation loan, however, there are a couple of important considerations to take into account.

Also be wary of consolidated credit card loan products targeted at borrowers with poor credit. These credit card debt consolidation packages offer miniscule interest rates that can look dangerously appealing to someone over their head in debt. These “too-good-to-be-true” credit card debt consolidation deals usually come with an enormous up-front application fee and offer no guarantee that your promised consolidated loan will actually come through.

What To Look For When You Credit Card Debt Consolidate

Despite all these warnings about sharks in the credit card debt consolidation pool, if you still believe you could benefit from a credit card debt consolidated loan package there are many decent, well-intentioned companies to help you consolidate credit card debt responsibly.

When you pursue credit card debt consolidation take your time and shop around for the best deal you can get. The abundance of credit card debt consolidation companies out there means that they have to compete for your business, not the other way around.

Read the fine print on all credit card debt consolidation loan paperwork before you sign so that you are clear on any possible penalties, hidden fees, or impractical contingencies to which you may be agreeing.

3 Alternatives To Credit Card Loan Consolidation

Be aware that a credit card debt consolidation loan is not your only option should you find yourself overburdened with debt. In fact, there are three other options available to you:

• Credit Counseling – to help you establish a Debt Management Plan, which usually involves a reduction in payments and/or interest and fees in exchange for your commitment to a strict, scheduled repayment plan;

• Debt Settlement – also known as debt negotiation or arbitration, in which you and your creditors strike a deal for a single lump sum payment that will satisfy them enough to consider the debt paid off in full;

• Bankruptcy – a legal process by which the courts, taking your current assets into account, helps you relieve your debts.

Each of these alternatives has its benefits and disadvantages and should be researched thoroughly before being pursued.