What You Should Know About Consolidating Credit Card Debt

Are you looking for the best method for consolidating credit card debt

? While debt consolidation loans can get you out of debt, do they really make the best method of resolving your debt? There are a few reasons why this kind of loan may not be a good thing. Debt consolidation loans were commonly used as a debt relief method in years gone by, but financial experts have changed their thinking on the value of debt consolidation loans for getting out of debt.

Debt consolidation loans are not easy to get at the current time. Banks are very hesitant to loan money, even to individuals with perfect credit. The big problem with these loans is if you default on your payments, this type of debt consolidation loan could lead to foreclosure proceedings since it is secured with your home. In the past, the worst thing that could happen for nonpayment of credit cards was bothersome collection calls and possibly garnishment of wages, but you did not have to be concerned about losing your home.

The second issue that arises with debt consolidation loans is the availability of credit on your newly paid off credit cards. When you transfer you credit card balances from your credit cards to your debt consolidation loan, you will have hundreds of dollars of available credit ready to be used. Unfortunately, within a year many people will use this credit again. Now they will have credit card payments and a loan payment.

Credit counseling is another debt relief option that does not require home ownership, a loan or good credit. Your interest rates will be lowered and your unsecured bills can be consolidated through the use of a credit debt counseling company. You cannot charge on accounts that have been placed in this debt consolidation plan. But if you are still charging, getting out of debt will be hard. In less than five years you can be debt free by placing your unsecured debts in a debt management program.

Debt counseling is a safer method of getting out of debt, but in order to remain debt free you will have to make changes in your lifestyle and how you manage your money. Educate yourself on financial issues. Getting out of debt is just one part of the big picture. Debt is not easy to manage and can creep up on you, but you can become debt free with discipline and persistence. You can get a free, no obligation quote today for debt freedom.

by: Marjorie Salada

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