Credit card debt is the number one type of debt in America and as the economy ebbs and flows, more and more Americas are succumbing to higher levels of credit card debt. Credit card debt can be crippling to the monthly finances of your house and, if left unacknowledged, have a detrimental effect on your credit rating and future borrowing opportunities.
Debt consolidation is one of the most popular forms of debt management when looking for a way out from under heavy credit card debt. There are other ways to work with creditors, such as debt negotiation or credit counseling, but debt consolidation can offer instant relief and lower your monthly payments and interest rates.
Before looking for a debt consolidation company or loan itÃs important to take a moment to get a grasp on the level of your credit card debt. Gather all your credit card statements and information and make a list with the following information: creditor, creditor contact information, current balance, minimum monthly payment, and interest rate. With this information in front of you, you will easily be able to see exactly who and how much you owe. Take a moment to add up all the account balances for a grand total of your credit card debt and write the number in big, bold numbers at the top of the list. This may be a difficult step, especially if you have never seen your credit card debt and balances all in one place, but the first step to debt management is facing the problem head on.
Once you have a grasp on the level of credit card debt you are dealing with, itÃs time to find a reputable debt consolidation company to work with. Though, debt consolidation companies are well regulated and monitored, there are fly-by-night companies who will and have scammed unsuspected people. In order to prevent your self from becoming a victim of one of these companies, you need to take the time to research the company and the people who work for them. Start with their website and look for an air of professionalism, certifications, real customer testimonials, company information, contact information including a physical address and information for services and fees. This is all basic information that should be readily available on the web site and by speaking to their staff. Aside from the credibility of the company, you also need to find out as much as possible about the credit counselors and the debt consolidation loans they offer.
With a solid, reputable debt consolidation company and trained staff member behind you, you can take real steps to combat your credit card debt and find a way toward a brighter financial future. The first step in the process will be to gather as much information about your credit card debt as possible, this is where the list you made will come in handy and start the process. You will then need to fill in the gaps for the information your credit counselor will request, as well as getting your credit reports to look for old or forgotten credit card accounts. Once all the information has been gathered you will be able to assess the depth of your credit card debt and have the appropriate information to contact those companies before the loan is sought.
Often tactics like debt negotiation will be used before a loan is issued to help minimize the amount of the loan. Since the credit card company will be receive a lump sum payout, there is often negotiating power and the account balance can be talked down then paid off. The credit counselor should offer these services, if you are uncomfortable with the debt negotiation process. Once agreements have been reached with all your credit card account holders, a loan will be requested based on your credit rating and/or available forms of collateral, then the loan will be used to pay off all your current credit card balances leaving you with only the debt consolidation loan to pay on. Often this monthly payment and interest rate are significantly lower than the combined payments and rates you were paying on before consolidating. You may also feel instant relief from harassing phone calls and letters.
Debt consolidation can be a great way to get out from under credit card debt and help your family get on a better path of financial security. With the relief from multiple payments and interest rates, you can be more confident in your monthly income and budget. The advice and financial planning information you receive from your credit counselor will help you make smarter financial decisions in the future and help you on your way to a more secure, brighter financial future.
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