Authored by Emeka Justice in Credit Card
Published on 03-25-2009
Are you in debt over your head because you went a little overboard with your credit cards? If you are in this category and you aren’t able to keep up your monthly minimum payments, chances are you are being hounded by creditors and collection agencies on the phone who want their money right away. After a while, debt like this can take its toll on you.
What can you do to rid yourself of a high credit card debt? You could declare bankruptcy, but doing so would leave a bad mark on your credit for seven years. A lot of times people who file bankruptcy end up deeply regretting it. Other options are available, so try those before resulting to filing for bankruptcy.
One way to get out from under a big credit card debt is debt consolidation. Through debt consolidation, you will pay off all your credit card bills in one payment. The great thing about some debt consolidation companies is that they that they also offer counseling that will help you prevent yourself from getting back into deep debt that you aren’t able to handle financially. Counselors will teach you how to handle money and how to live on a budget. With a credit card debt consolidation, you may also have the high interest you were paying turned into a lot lower interest on one single loan. Usually the payments for a debt consolidation loan are low enough that you will be able to manage them better.
One downside to having your credit card debt turned into a consolidation loan is that because the payments are usually lower, you may be paying the payments for a good while longer than what it may have taken you to pay off the credit cards individually. If you have a considerably large sum of debt accrued in your credit cards, you may end up with a consolidation loan that could take over ten years to pay off.
Although your consolidation company has solved your problem with credit card debt, have they solved it for your creditors? You may still receive harassing calls from some of your creditors until the consolidation company settles with them.
Many people have the misconception that if they consolidate their bills, they will have their credit saved as well. The truth is that your credit rating will be affected even though your consolidation company has paid off your creditors. The reason for this is because the debt consolidation company paid them and not you. You will still have marks on your credit report usually for the life of your consolidation loan.
The best thing you can do to avoid credit card debt stress is to avoid getting yourself into a deep debt with creditors in e first place. Don’t buy on impulse and only buy what you need, not what you want. Make sure you don’t use your credit card to pay other bills with and certainly don’t use it to buy groceries with. You should only use a credit card for purchases that you can’t afford to with cash at that time and only if that purchase is really necessary.