Credit card debt seems to be one of the easier forms of credit to get out of hand on you. When carrying that little card around, it’s easy to lose sight of the fact that every time you use it you’re adding to the total debt load. The fact that you don’t see any actual money change hands and that statement only comes in once a month is another way the credit card can bite you.
For those who have allowed their credit card debt to really get out of control, it may be time for some repairs.
Can I Consolidate?
In a word, “yes” you can consolidate your credit card debt. You can consolidate any type of unsecured debt, and credit cards do fall into this category. Basically, an unsecured debt is one where you don’t have a specific asset up against it as collateral. A car or house would be examples of secured debt.
When you consolidate, you typically take out a loan that wipes out two or more other debts. As an example, if you have three credit cards with unpaid balances, you might choose to consolidate them into one debt with one payment and one interest rate. This action will usually reduce the amount of overall interest you are paying and make your financial situation a lot more organized.
Generally, if you want to consolidate credit card debt you will either approach a bank or financial institution yourself or enlist the help of a service that specializes in that sort of thing.
While credit card consolidation isn’t the right option for everyone, here are some common benefits for those who choose to give it a try:
- Reduced interest payments
- No creditors harassing you
- One monthly payment rather than several
- Easier budgeting power
- Avoids bankruptcy & other unattractive options
- Organizes financial situation
Make a Plan
The first step to fulfilling your goal of credit card consolidation is to formulate a plan. Whether you want to try the DIY route or get professional help, you must write out all the details of all your cards. Anyone you approach will demand that information.
Next, get out there and make it happen. Naturally, your workload will be less if you use a service that specializes in consolidation, but the real key is to take action. Whichever way you go, be prepared to close those credit cards in order to make it happen. Having a bunch of open credit plus your new loan isn’t going to help the situation at all.
Contact us today if you are interested in your credit card debt consolidation options.