If you have several credit cards in your wallet that are costing a lot of money in
fees and monthly payments, you might be wondering if you can consolidate your credit card into one payment. It can be a wise choice if the interest on your new loan or consolidation agreement is lower than what you are paying now. If you want to consolidate, there are two ways you can do it.
The first way is to get a debt consolidation loan. Basically you get a loan and you pay off your credit cards from the proceeds of the loan. This allows you make one monthly payment instead of several. If the interest of the loan is lower than the rates on your cards, you save more money over the life of the loan. However, this can get you deeper in debt because the cards you just paid off have zero balances which allow you to acquire more debt.
The second to consolidate credit card bills is to enroll in a debt consolidation program. People often resort to this option after being denied a debt consolidation loan. The great thing about these programs this that it is open to people of all credit types. It is not a loan so you can't get in any further financial trouble. They negotiate with your creditors to lower your interest rates and waive over the limit fees. With no fees or high interest, more of you payment go toward the principle balance. One payment is made to the consolidation service and they disburse payments to your creditors.
If you are over your head in credit card debt and was denied a consolidation loan, a debt consolidation service can help you consolidate credit card bills. At rates close to 30%, it can take years to pay off your balance. With reduced rates, balances can be paid off in a couple years.