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Consolidation Options for Relief Purposes

By: Michael Millington

Credit card debt is one of the most aggravating forms of debt that Americans deal with. It is frustrating because of its recurring nature. It may seem that whenever you pay off a credit card, the debt comes right back in short order. The problem can be compounded when you own multiple credit cards. If one credit card proves stressful to deal with, more than one can have a profoundly negative effect on your credit. Here we discuss one method of dealing with these and similar debts: debt consolidation.

Is Debt Consolidation Right for You?

The first thing to recognize is whether debt consolidation makes sense for you. Consolidating your debt, while a convenience, is not for everyone. The ability to consolidate your debt varies with your ability to procure a loan. As with any loan, you would need to qualify for the appropriate loan. If your credit isn’t high enough, you might want to consider other forms of debt relief instead.

Multiple Forms of Debt Consolidation

The most common form of debt consolidation comes through a loan. In that sense, a loan allows you to have a finite method of dealing with your debts. Once you deal with your debts, you’re left with one debt to deal with. The thing that differentiates consolidation from other debt relief options is the ability to take care of your debt without paying for professional assistance. Taking out a loan can also improve your credit score as it adds another form of credit to your report.

Another form of debt consolidation comes in the form of credit card consolidation, or a balance transfer as it’s more commonly referred to. Credit card debts can be combined in a balance transfer to one credit card. Once again, in order to have the best rates for a balance transfer you would have to have good credit. Otherwise, your balance transfer credit card might not make a difference in your debt in the end.