subject: Credit Card Debt Consolidation - How to Consolidate Then Eliminate Credit Card Debts [print this page] Credit card debt is the net result of the credit business itself. The last few decades saw a sharp increase in the number of users of cards and the usage of credit cards. This gave people a chance to spend with liberty without bothering much about their capability to afford it. The consumerism grew by leaps and bounds and so did the supply of goods and services. The whole equilibrium of demand and supply was disturbed and met with a disaster. Today all this money has been spent and we don't know where has it gone? The plastic money and the virtual transaction eventually led to economic collapse. But, this is not the end of the world, as the problems came, researchers found a solution to it as well. Debt consolidation is one of the debt relief options.
Debt consolidation is a process to take one loan to pay off another loan. Credit cards generally charge a high interest rate as they provide unsecured debt, which means there is no guarantee and hence the risk associated is high. If you have multiple cards with high debt, you can take a debt consolidation loan and pay off the card debt. Debt consolidation loan has a low interest rate and is generally provided against a secured asset. It is more like a home equity loan. Debt Consolidation Company would use the equity generated in your home loan to pay off the debt to the card companies. Most of them would try to negotiate with the creditor to lower the interest rate or eliminate the debt amount. There are two main benefits associated with debt consolidation.
You escape the overhead of paying off the debt to multiple card companies; instead you make the payment in just one account, from here the money is disbursed to all creditors.
Also the interest rate on credit card is actually effective when you are behind the due date for payment, so if you get rid of the card debt, you can avoid the high interest rate related late fees and over due charges. Make a note; these charges generate the largest revenue for the credit card industry.
Now it is important to understand, that the debt consolidation loan you have taken needs to be repaid. It is generally distributed over a longer period to help you pay it off reasonably well, but this amount should not be mistaken for a free grant. Select carefully and wisely a debt consolidation company to work for your credit card debt elimination.
For the millions of Americans who are at least $10 k in unsecured debt, it would be financially prudent to consider the debt settlement option. Creditors are very worried about collecting their debts and legitimate debt settlement companies know exactly what methods to use to get your creditors to agree to eliminate a certain percentage of your unsecured debt.
Credit Card Debt Consolidation - How to Consolidate Then Eliminate Credit Card Debts
