Being able to consolidate credit card debt is a great way to lower a consumer’s paperwork hassles and save money on interest charges. When credit card debt is consolidated, a consumer takes several different credit cards with varying interest rates and payment terms and combines them into one. This is usually done by paying off the balances on each card with a single payment every month.
When consumers consolidate credit card debt, they first thing that they notice is that the amount of paperwork they have to deal with on a monthly basis is greatly reduced. With only one payment to make instead of dozens, the odds of a person missing one of their credit card payments go down dramatically – a lot can happen if you miss a credit card payment. This makes budgeting for credit card payments a lot easier. Instead of constantly tracking how much is owed on each card, all a consumer has to do is make a single payment every month.
The credit counselors who manage a consumer’s credit card debt consolidation are able to distribute the payment among the consumer’s different creditors. In addition, these professionals are able to negotiate with credit card companies for the consumer. Because they have had years of experience in the field, as well as good relationships with the credit card companies, they are often able to get consumers better interest rates and payment terms than they could otherwise obtain on their own.
Going through the process of credit card consolidation is fairly simple, and the results are great. Furthermore, it is possible to pay less each month while making more progress on the debt than a person would have done otherwise. Because a trained professional is handling the consolidation, it is possible to pay more on the principal of the loan, eventually eliminating the debt, than just making payments on the interest each month.
Every person will encounter financial challenges from time to time. This means that individuals are often put in a situation where they feel the pressure to make a quick financial decision regarding their debt. Many car owners have found themselves in such a situation. When faced with the choice of whether or not to transfer the total balance of the car loan to a new credit card, what is the best choice to make?
Sometimes the person transfers the total amount of the auto loan to the new credit card. The person must then pay the minimum amount owed each month in order to avoid penalties on the new card. The person also has to work to make sure that the entire car loan is paid off completely within a certain amount of time to avoid double-digit penalties, fees and interest and do so without falling behind on any other financial obligations.
The best approach is to simply consolidate any credit card and auto loan debt into a debt counseling program. The credit card debt relief program gives the person latitude and flexibility that would otherwise not be available under the credit card transfer scenario. The person doesn’t have to worry about the pressures of catching up with the past due amount on the new card and doubling up on subsequent payments to satisfy the minimum balance requirement. He or she doesn’t have to plan for a sudden rate increase after becoming acclimated to paying a certain amount as one would in the auto loan credit card transfer scenario when the introductory rate ends. The individual doesn’t have to shuffle between credit cards to keep up with the minimum balance requirements for the new credit card. The person simply works through a comfortable payment schedule without worrying about fees or penalties until the car and other debts are paid off.
Some people are able to handle the auto loan transfer balance with no problem if there aren’t any student loans, mortgages, outstanding medical bills or other debt obligations to manage. Most people, however, would be in a better personal finance situation if they entered a credit card debt relief program. In these programs, the person gets the advantage of having maximum flexibility in repaying the debts and access to personal finance coaching if desired.
Sadly, it’s become commonplace for many Americans to find themselves deep in debt. Help, however, is out there. Debt counseling services are available to help people who feel overwhelmed by their own inability to pay bills. Such institutions assist debtors by teaching them to manage money, consolidating debts and reducing outstanding balances. If you feel like you’re drowning in debt, try not to panic – there’s still hope for your financial future.
The first thing a debt counseling agency will look at is your finances. Counselors are specially trained to help you make a well-informed plan concerning your finances. By creating a sort of blueprint for your income and expenses, you will gain a better understanding of money management and the means to wield it for yourself.
Next consolidators can contact your creditors and arrange new payments and debt levels that benefit everyone. They’ll roll all of you monthly obligations into one reasonable payment, and take care of distributing it to creditors for you. By allowing an agency to organize your debt in this fashion, you will only have to make one monthly payment for all your debts, which you pay to the agency. This new plan offers relief in more ways than one; in addition to less debt and the convenience of a single monthly payment, you won’t have to endure any more phone calls from creditors.
Another fantastic offering debt counselors provide is information. Credit education may not sound like much fun, but if you’ve gotten yourself in deep trouble, information will empower you as you fight your way back to the surface. Once you understand how to properly relate your income to your expenses, you’ll be able to get out of debt and maintain your freedom.
Financial education is so valuable that even those who don’t require extensive help from a counselor will certainly benefit from it. Often these institutions offer courses in debt management or budgeting that anyone can take without having to jump through the usual counseling hoops.
Credit counseling puts the power back in your hands, no matter how much debt you have accrued. It may take a few years, but during that time you’ll be able to establish peace of mind, thanks to your new power over your finances.
After people realize that they have more than one considerable debt, they look for a way to eliminate those debts quickly. These people could be making large payments to their creditors for decades before they can say that they are safely out of debt, but they would have lost several years that they could have been saving money to make their dreams come true. Consolidating their debts will make it possible to reduce the time that they will be paying these debts, and they can live much less stressful lives in the process.
What Does Debt Consolidation Mean?
Debt consolidation means that consumers who have several debt payments will reduce them to one. As it is right now, people are making more than one monthly payment to more than one creditor. These debts may all have different interest rates, and this can mean that consumers are paying a lot to these creditors in interest.
After people receive debt consolidation help, they will not have to worry each time another bill comes because these bills will no longer be placed in their mailboxes. Instead, they will send a single payment monthly to their consolidator, who will take care of paying off the various creditors. Best of all, this amount will be reduced once the consolidator gets the creditors to agree to drop certain fees and reduce high interest rates.
The Advantages of Obtaining Debt Consolidation
Obtaining a debt relief in this manner leaves people with a debt to repay, but it is a much more advantageous option than keeping their debts in place for many years. The main reason is because consolidators can use their reputation and relationships to negotiate for better terms for their clients. They also eliminate the need to write several checks each month to several creditors. With the consolidation option, consumers only write one lower monthly check to one consolidator for the duration of the program.
Are you having a difficult time keeping your head above water when it comes to debt? If so, you’re not alone. With a shaky economy and low-paying jobs often failing to cover basic expenses, it can be very difficult to stay out of debt. If you are in it, however, don’t despair. You always have options and resources, and online debt consolidation may be able to help you reclaim your life.
As you look into debt consolidators, you should think about ways to get a fresh start and stay in the black. That may mean getting an extra job or selling some possessions that aren’t necessary. You should make up a budget if you don’t already have one, and this will help you to determine how much money you need to make every month in order to be able to afford all of the things that you need to buy.
You can also seek out advice from friends and relatives and ask if a trusted person would be willing to be your accountability partner. That way, whenever you feel the urge to spend money on something you can’t really afford, your friend can remind you of the drawbacks of that decision. Debt is something that happens slowly, and if you’re not aware of it, it can snowball. If you stay on top of it at every turn, you can better avoid having to get out of debt again.
If you are satisfied that you will be able to take advantage of this resource and start fresh, then online debt consolidation may be a good option for you. Investigate the different companies and, if you feel comfortable, ask around to see if anyone you trust has a strong opinion about which is best. The important thing is to be sure that you are doing better after the debt consolidation.
Managing debt is a way of life, and it’s a daily struggle for many people. Recognize that your debt situation will probably fluctuate, and be at peace with that. As long as you are doing the best that you can to be in a solid financial situation, you have no reason to be embarrassed about being in debt. Be open to accepting help when it is offered to you but also be on your guard to make sure no one is trying to take advantage of your vulnerable position. With a good head on your shoulders, you can keep debt from being a negative force in your life.
photo credit: Ignacio Conejo via photopin cc
I’ve read hundreds of articles about different ways to cut your budget in half, but never tried to re-imagine my budget. The truth is, you get used to certain luxuries – especially when you haven’t had to save for anything. I’ve always made a decent wage, but spent it nearly as fast as it was earned. I always told myself that I’d start saving on the next paycheck.
I never learned my lesson, until I got into a fender bender that destroyed my car. Friendly advice: make sure you opt for the Gap insurance when you take out a loan on a car! I didn’t , and I’m stuck making payments on a vehicle that’s been scrapped for parts. I needed a new car to continue working, so for 2 years now I’ve been making double car payments. That’s enough to force anyone to learn how to budget!
In order to clear enough money for my new car payment, I had to make sacrifices. With any budget, it’s about decision. How did I convince myself that I could survive without cable? Make bargains. No cable, but you can watch just about anything online now, right? Keep internet. Save $40 per month. Upwards of $10 to go out for lunch every day at work? Pack lunch, save $60+ per week ($240 per month). Just like that – two small lifestyle changes and I’ve got an extra $280 each month to put towards my new car.
Anytime you adjust your budget, don’t think of what you’re losing – think of alternatives. This makes it easier to consider the fact that you don’t need to be spending $4 a day on coffee that would cost you $0.10 at home. It’s easier when you consider what you can do with the money you save, and think of opportunities that arise when you eliminate a luxury.