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Did you know that in 2012, credit cards rank as the third highest debt in American homes? This is based on the analysis derived from the US Census, and the Federal Reserve’s Survey on Consumer Finances and Aggregate Revolving Consumer Debt Survey. The top two loans that burden consumers are mortgage and student debts.
Credit cards, are estimated to be almost $16,000 for the average American home. Given that amount plus the rising costs of living makes you wonder how on earth can we cope with such heavy debts?
Apart from putting a tight rein on your spending, you can always consolidate credit card debt. We will advise you to consult an expert before you finalize your decision but let us educate you first on what this option can bring you.
The name itself is practically self explanatory. It means you will combine all your credit card payments into one. If you own multiple credit cards and you have somehow maxed them out, the interest rates alone will be enough to cripple you. This is likened to a relief program that will allow you to make only one monthly payment for all of them.
There are three options to use to consolidate credit card debt.Taking Out a Consolidation Loan
This option simply means you will get a huge loan that will allow you to pay off your credit cards and combining all those payments under a single obligation. This is called a credit card consolidation loan and it is the same as a personal loan - but with lower interest rates. The great thing about this is it combines all your debts into one and thus making payments and monitoring a lot easier. It is, however, only advisable for people with good credit standing - otherwise, you will be given a high interest rate that could end up making you pay more than what you originally owe.Transferring of Credit Card Balances
This is the Do It Yourself option. You will have to transfer your debt to the credit card with the lowest interest rate. There are credit cards that are specifically marketed for combining balances and they are offered with lower rates and monthly payment schemes. Just call your credit card company and ask about your options. Take note that these are usually promotional in nature so there is an expiration to it. After the promo expires, you are back to paying off high interest rates once more. You can easily go from 0% interest to 15% - 18%.
A piece of advice is in order here. While it is tempting, is not advisable to close the credit cards that you have cleared as this will look bad on your credit score.Through a Credit Counseling Company
The last option involves the help of a professional credit card consolidation company. They will work with your lenders with the hope of getting a lower interest rate and more time to pay back what you owe. They will help you come into an agreement with your creditor so you will be given a more lenient payment plan. The company will act as the middle person who will pay off all your credit cards.
An Alternative To The Traditional Way To Consolidate Credit Card Debt
Before deciding on the path that you think will help you best, we’d like to offer another consolidation solution that involves debt settlement. NationalDebtRelief.com is a company that will help you achieve this. Our goal will be to prove to your creditors that you are unable to pay for the original balance of your debt. We will negotiate on your behalf so your creditors will allow you to pay only for a percentage of your total debt - depending on your financial capabilities. We will discuss the amount that you can afford to pay on a monthly basis and we will work around that figure. You will send us that amount which will be held in an FDIC insured trust account. That is where we will get the funds to pay off the settlement that we can reach with the credit card companies you owe.
Give us a call so we can discuss your different options. The initial consultation is for free.