Note From Wil: This is a guest post from my friend, and fellow personal finance writer Martha Jackson.
I like to include the writings and opinions of as many people as I can. If you want to contribute to Finance For Youth: The Blog, send me an email:
Are you having any problems with your credit cards? Are you failing to maintain the different credit cards that you have been using? If you want to get out of this situation, you will have to first think as to how you can stop your debt amount from increasing. What you need to realize is that, in order to pay off your credit card debts, you will have to stop the debt amount from increasing. Now, the only way in which you can do that is putting a stop to the usage of your credit cards. After that you can opt for credit card consolidation in order to make debt pay off easier.
Myths and truths related to consolidation
Credit card consolidation is one such debt pay off method that can help you to pay off your bills easily enough. Consolidation lowers the interest rate on your credit card debt and also helps you save some money on your debt payments. Thus it helps to manage your finances more efficiently. If you are able to both save money and pay off your debts, you might be able to become almost a hero amongst your friends – like the Greek hero conquering the evil called “Debt”.
However, while consolidating your credit cards you should be aware of the myths and the contrasting truths associated with credit card consolidation or else you might end up having additional financial problems.
Myth: Credit card consolidation cuts interest rate by half – One of the myths associated with credit card consolidation is that, consolidation cuts the interest rate by half. Consolidation lowers the interest rate but not by half.
Truth: This will depend on the creditor – The truth is that consolidation lowers your interest rate but by how much it may get lowered will depend on your creditor.
Myth: Credit card consolidation cannot be done all by you – Many people believe that consolidation cannot be done all by yourself. You need to take the help of a debt consolidation company.
Truth: “Do it yourself” credit card consolidation exists – But the truth is that you can try the “Do it yourself” credit consolidation. In do it yourself consolidation, you need to negotiate with all of your creditors and request them to agree to consolidation as you are having financial problems.
Myth: Credit card consolidation loans are easily available – Many believe that consolidation loans are easily available. However, this is another myth.
Truth: You need to have good credit in order to get the loan – You need to have atleast a respectable credit and you will also have to go through all the paperworks in order to get a loan.
Myth: Debt consolidation and settlement is same thing – Another myth associated with consolidation is that it is the same thing as debt settlement.
Truth: The two are different debt pay off methods – However, the truth is that debt consolidation or credit card consolidation is different than debt settlement. While consolidation lowers the interest rate on your debts, settlement lowers the outstanding debt that you have.
Myth: Consolidation always saves money – Consolidation always helps you to save money. This is another myth and will depend on the way you are making the payments.
Truth: You will have to pay off fast in order to save – the truth is that you can even end up paying more towards the interest if you take long time to pay off the debts. So, if you want to both save money and pay off debts, you will have to try and pay off the debts as fast as possible.
Myth: Credit card consolidation hurts your credit – Another myth is that consolidation hurts your credit.
Truth: Consolidation actually improves your credit – However, the truth is that consolidation improves your credit as you make on-time payments. However, your credit may be hurt if you close down your accounts after consolidating all of the debts into one large debt.
Visit debtconsolidationcare.com for more tips, tools and resources for dealing with debt.
You need to be aware of all the ins and outs of debt processes irrespective of the type you are opting for. Another thing that you should be aware of, before consolidating your credit card bills is that you will be able to consolidate only your unsecured debts. Secured debts cannot be consolidated.
Author’s Bio: Miss Jackson loves to write financial articles and she is a contributory writer associated with the Debt Consolidation Care Community and has written several articles on debt consolidation, debt settlement, bill consolidation and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.