Individuals that are facing financial difficulties are often being told to make the consolidation of their credit cards into one because having multiple cards is the main source of their problems.
Credit cart consolidation means collecting all your card debts together and putting it into one account with one payment per month.
There are various methods to make the consolidation of credit cards but there is no one universal method that would work for everybody as different people have different financial standings. The information of this article is intended to help you to choose the right method for your situation.
Consolidation of Credit Cards Taking A Loan
Obtaining a loan for making the consolidation of your cards might be very good option which can help to preserve your credit rating but it will give you benefits only if a new rate is lower or equal to the existing rates on your cards.
If you have the opportunity to secure your house against the loan then you are likely to get a lower interest rate by taking a secured loan but be beware of prolongation of the term too much and be sure that making the payment is affordable for you as your home is at risk in case you won’t be able to handle with these payments.
After consolidation of your credit cards into one with a loan, make sure that you won’t use them again as it can lead to even worse financial standing.
Consolidation of Credit Cards – Debt Solution
One of the generally accepted way to consolidate cards is to approach a company that specializes in this question and can give you some advice on how to reduce your debt. As a rule they can offer two options – debt settlement and debt management.
For individuals who have a stable income, this is the best solution to consolidate credit cards into one that requires no loans and helps to avoid bankruptcy. They will allow you to have one payment per month that will be affordable for you and they will also negotiate with the creditors to make an arrangement and in some cases it’s possible to get the interest frozen or even some of the debt can be written off.
Debt Solution- Bankruptcy
Only in case you have used up all other methods, should you pay attention to this option. If you have large amount of debt and you don’t have or have very little amount of monthly disposable income, this might be the only option to clear off your debt.