In the simplest of terms a credit card debt consolidation program is the process of negotiating with your current creditors to consolidate all of your indidual high interest rate credit card payments for one, lower monthly payment.
If you ‘ve found yourself with more credit card debt than you can handle and your monthly payments have become overwhelming than a credit card debt consolidation program may be a good opportunity for you to get back on track financially.
A credit card debt consolidation program does not eliminate your debt.
The cause of credit card debt
Before choosing a debt solution it’s a good idea to figure out why you are in so much debt because if it is a case where you have a challenge controlling your spending than simply getting a lower monthly payment may help your pocketbook in the short run but ultimately get you in more trouble by giving you more credit to spend therefore increasing your debt load.
On the other hand if you’ve found yourself in a pickle due to a reduction in pay or you simply want to be able to put more money towards the principal of your debt vs. interest than a credit card debt consolidation program may make sense to consider.
Enrolling in to a Credit Card Debt Consolidation program
There are many companies out there who can get you started with your own credit card debt consolidation program. Be wary of the costs and check their rating on the BBB. After you’ve done your due diligence call or sit down with a debt counselor and they will assess your particular situation. Afterwards they will have a good idea of a new payment they will be able to achieve by negotiating with your individual creditors.
Why will Credit Card companies do this?
At the end of the day your creditors want to get their money. The amount of debt you owe doesn’t change just because your payments are lower. Your creditors will still get back every dime that you owe plus interest…. just less interest.
Does it hurt credit score?
Typically a credit card debt consolidation program will not hurt your credit score.
Can I do this myself?
You may be able to negotiate directly with your creditors effectively. Try calling them first to see if they will work with you. It’s free and you might be just as effective. It depends on your creditors and their willingness to understand your situation and why it makes sense for all involved to lower your interest rate/monthly payments.