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Debt Consolidation
Consolidate Payments and Eliminate Credit Card Debt
Author: Ronnica Rothe The more credit cards you have, the more credit card bills you must pay each month. Not only is it a hassle to hold track of all these accounts and writing and mailing checks to each account, it is also a strain on the wallet to make those payments. In many situations, debt consolidation can relieve both of these problems.
Debt consolidation loans are one way you can consolidate your credit card bills into one payment. Like any other loan, the lender will look at your credit history and score to determine what interest rate to offer you. If you have struggled with missing or late payments anytime in the last 7 years, you will likely have poor credit. Also, being near the credit limit on your accounts or applying for several new accounts at once will also lower your credit score.
Because most individuals who desire to consolidate their debt suffer from these negative credit factors, most debt consolidation loans have high interest rates. These high rates may or may not be better than the rates on the credit card debt itself. Another debt consolidation solution is needed.
A short-term debt consolidation maneuver is to transfer balances from one card to another. Credit card companies will often offer you incentives to do this and even make it very convenient. While this might be helpful in the short run, it does not provide any long-term benefits. You might be able to receive a low interest rate on your debt at first, but when the incentive rate ends in six months or so you will be back to paying high interest rates on your debt.
One type of debt consolidation that can lower your interest rates until you pay off your debt is a debt management plan. These plans allow you to pay your debts in one payment and lower the amount of interest you pay. The debt management company works with your creditors to work out a worthy deal for you. They can also provide you with the accountability you need to pay off your debt more quickly, and often at a lower monthly rate.
Talk to an accredited credit counselor to discuss which debt consolidation option is best for you and your situation.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/consolidate-payments-and-eliminate-credit-card-debt-116820.html
About the Author:Ronnica Rothe is a graduate with honors from the University of Oklahoma and a current student at Southeastern Baptist Theological Seminary. She works with Personal Financial Network (pfni.net) to assist individuals get out of debt and reach their financial goals.
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Keywords:
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