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credit card consolidation

Credit Card Consolidation: Making Debt Vanish

By: Michael Millington


Most people have multiple credit cards in their purse or wallet. Therefore, credit card consolidation can become a necessary form of relief for many. Consolidating your bills or other financial obligations can be an instant help in reorganizing your debts. However, there are instances when credit card consolidation does little (if anything) to help eliminate debt. Here we will differentiate between good and bad usage of credit card consolidation.

The Uses of Credit Card Consolidation

When Credit Card Consolidation Works

Credit card consolidation works when you have the ability to make payments on your debts. Once you consolidate your debt, you will still have a debt to pay. If you were unable to make your payments before you consolidate your debt, not much would change. Unless you have a method of making steady payments, you can easily find yourself in greater debt than before. This type of consolidation helps to organize your debt, not lessen it. So if you can’t already pay your debt off, credit card consolidation might not be the solution for you.

The main benefit of debt consolidation is the ability to turn multiple payments into one monthly payment. This can save you from remembering multiple due dates or paying multiple late fees or interest rates. This method of debt organization can make it easier to avoid adding extra complications to your monthly budget,

When Credit Card Consolidation Doesn’t Work

As stated previously, this type of debt consolidation won’t work if you cannot make your payments already. While you would only have to make one payment a month (against your consolidation loan), the amount of the payment might be much larger than each individual debt. The other obstacle involved in consolidation is the ability to qualify for a loan at all. In order to consolidate your debt you have to qualify for it. If you have poor credit, you might find yourself accepting higher interest rates on loans or being rejected altogether.

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