Credit card consolidation is a classic computational invention made by mankind. A wonderful and unique process that involves theoretical and practical implementation of mathematics to bring all your multiple credit card payments into one single monthly payment. Sounds confusing?!
Well, don’t you worry, for that’s a subjective definition I just gave. I will surely break it down gradually as you progress down to the end of this post.
Here’s a whole new, different take on how debt consolidation for credit cards works, and how you can benefit from it! We are glad that you have landed on the Credit Card Consolidation Blogs. Your one-stop solution for all debt and credit-related queries. Share the post links on your social network pages if you like the topics covered in our blog section.
What are the few basic facts of credit card debt consolidation?
Best if you have multiple bills to cover:
Debt consolidation is a debt relief option that is best suited when you have multiple debts to manage. Having too many debts around you means you will have to make payments on each of them separately. Maintaining separate payments for different debts might become really problematic if you are unable to keep track of them.
Many people will advise you to go for a budget, or might even ask you to go for a counseling session in order to organize your finances. But we here say that the best option available to you is probably debt consolidation.
If you consolidate your credit card debts, then you will have only one single monthly payment to make for all your credit cards.
There are, in general, 3 most suitable ways to consolidate your debts.
- One is the famous credit card balance transfer method.
- Second is the DIY debt consolidation, where you can take out a consolidation loan to pay off multiple credit card debts.
- And the third is professional debt consolidation, where you will get help from a third party debt consolidation company.
All three of them are equally valuable and effective.
You can do consolidation even if the debts are in collections:
One major pro of credit card debt consolidation is that it doesn’t matter whether or not your debts are in a collection. Even if the debts are currently handled by collection agencies, then you can also choose debt consolidation! But in this case, I would say that it’s better if you do professional debt consolidation.
Dealing with collectors is not at all easy, and it requires proper precision in keeping up with the payments. By enrolling in a credit card debt consolidation program with a consolidation company, you will receive a good budget plan that will tell you how to save money each month for the one fat monthly payment you will make to the company.
Once you make the payment, the company will then divide the amount among all your creditors/collectors, as per the agreements signed between the consolidation company and them.
It is still good if you want to consolidate prior to defaulting on payments:
Debt consolidation can be used even if your debts are not in a bad place to start with. Many consumers avail of credit card debt consolidation so as to modify their payment structures as per convenience.
As mentioned earlier in the post, consolidation gives you the opportunity to make one monthly payment which is a lot better than making multiple payments.
If you have not yet defaulted on any of the credit card payments, then for consolidating them you should either take out a consolidation loan or do a balance transfer.
A consolidation loan is all the way similar to a personal loan, only that the purpose of this loan is different. It’s meant to pay off your other existing debts.
Once you have taken out the loan, you will straight away clear all your credit card debts. So now you will only have this loan to pay off. A single loan means a single monthly payment.
Again, the same thing will happen with a credit card balance transfer. This is just another way to consolidate your credit card debt. Unlike a consolidation loan, here you will take out another credit card that has a credit limit, which is equal to or more than the total balances combined on your existing credit cards.
Once you successfully transfer the balance to this card, your other card will be free of debt and you will only have this card to pay off. If you are lucky enough, then you might get a 0% APR introductory phase for the new card, which will give you a chance to pay off this card without any interest charges during the special period.
Always try to take out a balance transfer card from the same bank, from where you have issued your other credit cards, to get this premium 0% APR offer!
Expect to see a rise in your credit score over time:
With credit card debt consolidation, you will be having scheduled on-time payments each month for your debts, and in the end, you will be paying off your debts in full. This is a huge positive aspect connected with debt consolidation. It will be seen by the creditors, collectors, and credit bureaus as a sincere approach from your side.
You can also expect to see a good status reading for your debts, on your credit reports, after you have cleared the last dime on them. A good credit report surely means a good credit score! Debt consolidation has always helped debtors to pay off debts fast and at the same time keep up a high credit score.
Don’t hesitate to state your case to a professional debt consolidation company, if you believe managing debt consolidation, all by yourself is very difficult. Your life is your call! Act fast! Be Debt-free and live a happy life.