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Bankruptcy Marketing:;;Article::Credit Card Consolidation Versus Debt Payment

Choosing Credit Card Consolidation Versus Debt Payment
If you find yourself in trouble with credit card debt and do not
know where to turn, you may have a couple options that you
professional help in getting control of their finances. However
you can reduce your debt on your own if you have and plan
and follow it.

Basically you have a couple of choices in designing your plan.
You have to decide if you are going to use credit card
consolidation versus debt payment methods. The debt
management method is basically what you are doing when
making your monthly credit card payments to each of the card
companies that you owe money to.

As you know each credit card company has its own set of
rules you must abide with. Interest rates and late payment
penalties are also different. In addition you will have a
minimum payment that must be made to each company. When
these minimum payments are added up they amount to a
significant amount of money. In addition your ability to pay
down the principle of each card debt is diminished as well.
These are important points to consider when deciding to
choose between credit card consolidations versus debt
payment to eliminate your debt.

A much better alternative to making multiple credit card
payments is to consolidate all your debt into a single loan with
a single monthly payment. In general you can usually lower
your interest rate and even you total monthly payment by
doing a debt consolidation. All of which will save you
significant money over time.

There are several methods that can be used to consolidate
your credit card debt. One option that is pushed by credit card
companies and that is to transfer all the debt from all your
credit cards to a single card account. Frequently card
companies will provide incentives in the form of reduced
interest rates for the first few months after the transfer. While
these offers appear to be a good deal they do have
unacceptable risks.  If you read the fine print of the credit card
agreement or contract you will find that the card company can
and frequently will increase the credit cards interest rate for
almost any reason.

Credit card companies are no different than the mafia run loan
sharks that charge high interest rates. They frequently change
interest rates to prevent you from paying off your credit card
debts. Even applying for an additional credit card with another
company may be cause to raise your interest rate.  Credit card
companies are a real threat to you and to our country.

A better solution is to apply for a debt consolidation loan with
your credit union, bank or savings and loan. If you have
collateral in the form of real estate equity in your home or
business you can frequently negotiate a low rate loan that has
a longer repayment period. Even if you do not have collateral
there are loan programs designed to consolidate debt that will
save you money with reduced interest and longer repayment
periods. Probably the most important aspect of this type of
debt consolidation loan is that the interest rate can be locked
in for the full term of the loan. However you can opt for an
adjustable rate loan that is tied to the prime rate. Although this
is not a good as a fixed rate you do not have to worry about
waking up tomorrow to find that your credit card consolidation
loan interest rate has been increased to 30%.

When deciding to use credit card consolidation versus debt
payment methods to eliminate or reduce your credit card debt
you need to do a good job of researching all your options.  If
you are disciplined and follow your plan you can get out of
debt.


                 Credit Card Consolidation Versus Debt Payment
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