Is credit card consolidation for you?
What is it and how can it help you?
Or, will it lead you deeper into a hole? First, a definition of what this term means.
There are many different ways that this can be taken. Here are the two we will discuss.
For those who are doing well with their credit and are looking for a way to pay off all of their credits into one account, they can do this by consolidating all of their bills onto one bill or only have one creditor.
Or, if you are in debt and can’t find a way out, you may be considering calling a company to help you consolidate your loans into one payment that you make to them.
They will then pay your creditors individually. All of your accounts will still be maintained, but closed.
As for how well credit card consolidation will work for you, that remains to be seen.
In the first example, people who have decent credit can open an account or transfer the balances for all of their credit cards onto one account.
This eliminates all of the other bills and you only have one creditor, one payment each month.
This can be beneficial because you are still on good terms with these creditors; simply paying them off may help you to increase your credit rating.
That is as long as you maintain your good terms with the remaining creditor.
Credit card consolidation here can be a good thing in many ways, then.
In the other example, you are already behind and struggling to keep up.
There are many companies that will help you lower your interest rates and pay off your credit card bills faster.
In most cases, your accounts are closed and you must use a bank draft in order to make the monthly payments to this company.
Because these companies have a working relationship with the credit card companies, they can help you lower your fees and start catching up by using a credit card consolidation in this manner.
Does Credit Consolidation Work
If any credit card consolidation is to work, you are going to have to maintain your promises and work towards paying off any remaining balances you may have.
It is wise to find the best companies to work with based on the fees they charge you and the relationships they provide.
You can benefit from credit card consolidation, if you work towards it.