Credit Card Debt Consolidation

When you are mired in debt, you may feel tempted to pull the blankets up over your head and hope that your problems will just disappear. First, there’s some bad news. No amount of hoping will make your credit card debt problem disappear by itself. Now, listen to the good news. People are available who can assist you. When your debt buries you under an avalanche, a debt consolidation company can help you find a way out.

You more than likely have seen advertisements for these companies, but like many people, really don’t understand what they do. Basically they negotiate with your creditors to reduce your debt as much as possible. Then, they will make payments to your creditor, on your behalf, for the reduced amount.

Consolidation loan is the term used for the money that is provided to pay your credit card debt and other debts. After all of your other debts are satisfied, these loans are the only debt you have, so you will only be making a single monthly payment. More often than not, the interest rate is lower than that on your credit cards, so you wind up saving money on your overall financial obligations twice.

Normally debt consolidation loans are only available to homeowners, but there are some companies that will still work with you even if you do not have any property with which to secure the loan.

Credit Cards Debt Consolidation FAQ

Question: Credit card debt consolidation companies, Anyone know of a good one?
I’ve become over whelmed with my credit card debt and I’m getting those phone calls because I’m missing payments and such. Anyway I’m looking for a credit card debt consolidation company that doesn’t screw people over, anyone know of any from experience or just know a good one?

Answer: Try http://personal-financial-help.solutionsarticles.com/ they aren’t that bad (7% for me) and definitely quick.
The Idea is to find a loan at less interests than you pay now, and fixed interests.
Credit cards can have high interests so it shouldn’t be difficult to beat them, depending on your credit score.
Whoever you go with, you should always check if they belong to the American Bankers Association.

Question: What is the min. amount credit card debt you must have to do debt consolidation and is this a good idea?
I wanted to do credit card debt consolidation but I am skeptical if this is a good idea with the economy. I am very far behind on my credit card bills and the only reason I can’t afford them now is because the min payment has gone through the roof. The all together debt that I have is less than 2,000.

Answer: You can try what I did but since you are behind on payments it may be hard. Get a small personal loan to cover everything you owe, tell the bank this is what you are doing. I cut my interest rate into less than half of what it was by going through my credit union. Thing is, you need to cut up those cards once the loan goes through, otherwise you may be tempted to use them again and just get yourself in double trouble.

Question: What is the benefit of using debt consolidation for credit card debt?
I am trying to decide to either call the credit card companies myself and negotiate for a lower payoff/settlement amount, or to use a debt consolidation company? If I negotiate with the credit cards directly, will that be considered a charge off? I would want to settle myself if I can to avoid paying all the months of high interest. But if I use debt consolidation, then they will charge me a fee every month for so many years? What is their purpose? What would be the best route to go financially?

Answer: You have to make sure you have a reputable debt consolidation company. There are many out there that are not. I know that Consumer Credit Counseling is good because NCUA backs them and I have to work with them to coordinate classes for our members. The thing about debt consolidation companies is that sometimes they can get a better payment plan or rate because they have deal in place with the cc companies. Also, the credit card companies feel better because they know you are working with someone to actually pay down your debt.

You could also look into a consolidation loan through a credit union or bank. You have to look around and make sure you are getting a decent interest rate.

I think that you can get free consultations with the debt consolidation companies. This should tell you what the costs/fees would be. You can always try the calling the credit card companies first to work out a deal.

Question: Considering credit card debt consolidation, would this be a good choice; recommendations who I should use?
Is there way to consolidate my credit card bills and get a lower payment without affecting my credit?

Answer: Transfer the balance to a new card with 0% INTRO APR for balance transfer. pay the monthly minimum on time to build up your credit rating. make sure read all term related to rate. once the intro period near the end transfer it again.

Question: Bank loan or debt consolidation program for credit card payoff?
Due to a family tragedy, my husband and I are currently in $26,000 of credit card debt. All of the payments are current and the cards are paid on time with the accounts still open (we are not still charging, though). We are looking to seriously pay this down before the interest eats us alive. My husband wants to take out a bank loan and pay the cards off that way, but I am wondering about the debt consolidation programs you hear about (I know some of those are scams and some are real). Any advice or experience?

Answer: A bank loan will require some form of collateral, like a house. If you can’t pay the loan, you lose the house.
Debt consolidation will trash your credit score.

You are better off negotiating with each credit card. Mention to them that you may have to declare bankruptcy due to the high rate and could they lower the rate. In most cases, they would do that.

Question: Is it recommended to use debt consolidation for credit card debt?
I am approximately $25k in debt, should I use a debt consolidation agency?

Answer: Talk to a credit counselor first. Then see what the consolidation firms can do. Many times credit counseling firm has better rates or can get your debt combined for little or no fees.

Question: Who is the best company to go with for credit card debt consolidation?
I need to sign with someone ASAP I can not pay these cards anymore. I am really in trouble. What should be my first move?

Answer: If you really can’t pay your bills consider filing for bankruptcy. If you hire a company to renegotiate your credit card bills it will hurt your credit anyways and you will have to still make some payments to your creditors.

Question: Can combining credit cards (NOT Debt Consolidation) hurt your credit score?
I have several credit cards, many from the same institution. I’d like to combine all the ones from the same institution into one. All the cards are paid off monthly – I am not carrying any debt. Will this hurt my score?

Answer: Closing them will pull your score down a few points. Less Available unused credit.