Consolidating Credit Card Debt

Consolidating credit card debt is typically the first solution Americans think of when it comes to the problem of credit card debt. It's far too easy to become swamped with such debt and forced to consider consolidating credit card debts. Individuals obtain one credit card, which leads to many more credit card offers. Credit card holders get caught up in the ease of paying via credit card and, before they know it, they owe more than they can afford to pay each month on multiple credit cards. The obvious option to most would be consolidating credit card debt, meaning all credit card bills are rolled into one by a debt consolidation service or by obtaining a personal loan.

Consolidating credit card debts can be very beneficial to those who do it. Both the options of consolidating credit card debt through a personal loan or a consolidation service lighten the borrower's burden of multiple bills. The borrower also doesn't have to choose between debts, thus neglecting one credit card debt over another. Consolidating credit card debts can also provide a lower interest rate. The personal loan or the consolidation service will tack on an interest rate, but it is usually lower than some or all of the interest rates on the existing credit cards. Consolidating credit card debt is also a way to end those annoying phone calls from angry creditors. Fortunately, a debt consolidation service will work as a middleman between the borrower and the creditor so they never have to speak to each other directly. Consolidating credit card debts through a personal loan can also end all contact with the creditor if the borrower closes the credit card accounts after paying off the debt.

There are some disadvantages when consolidating credit card debts. There is still an interest rate to pay on a personal loan, which, in some cases, could be higher than the rates of some credit cards. The borrower who chooses a personal loan for consolidating credit card debt may be tempted to accept a larger loan than necessary, leading to only heavier debt. Another downside to obtaining a personal loan for consolidating credit card debts would be collateral. Some borrowers may not have personal property to secure the loan. The disadvantage of consolidation services is the attachment of interest and fees for consolidating credit card debt. Also, if the borrower hires a poor consolidation service who doesn't not pay creditors on time, the borrower's credit score will suffer.

Before consolidating credit card debt, those in debt should consider if they are abusing their credit cards. Christian individuals in credit card debt need to pray about their financial decisions and commit to a careful budget. If an individual decides that consolidating credit card debts is the best option for them, they should seek out a personal loan from their own financial institution or seek debt consolidation services with a company of high reputation which has little or no complaints recorded by the Better Business Bureau.