Consolidating Credit Card Balances

Most people have multiple credit cards. Keeping track of several different bills (and billing cycles) can be difficult—and if you miss a payment, your rate may increase and/or you may have late fees or penalties. Worse, credit cards tend to be among the highest interest debt most people have. What can you do if you’re under siege by several credit cards with high balances and high interest rates?

One option is to consolidate your debt, with an eye towards both simplifying it and reducing your monthly payments.

What is Debt Consolidation?

The essence of debt consolidation is that you replace multiple debts with a single, more easily managed debt. This is typically done with a credit card debt consolidation loan, which is a loan used to pay off the credit cards in full. If you can secure a loan that’s at a lower interest rate and possibly tax deductible to boot, you’ll come ahead a winner. Home equity loans are therefore a popular choice for this, though not the only one.

Debt Consolidation Plan: Credit Card

Of course, consolidating your debt, then borrowing more on your credit cards, doesn’t get you much—a little breathing room, maybe, but that’s about it. You need to have a debt management plan—a game plan for borrowing, saving, and paying that will let you use the payment reduction you can get from consolidation as the first step in paying off ALL your debt—including the credit card consolidation loan itself.

Consolidating Credit Card Debt Program

A debt consolidation program or a credit card debt management plan is similar to a weight-loss or substance-abuse-treatment program in some ways—it’s a place or organization that will provide advice, assistance, and support in consolidating and managing debt. One service they provide is that many of them will make debt consolidation loans. The problem with debt consolidation programs is that while some are very good, some are not—they’re staffed by inexperienced and/or overworked  people who just can’t do a good job for you. And many—too many—are fraudulent: they’re set up to make money off people in desperate straits, but they charge so much for their services that they can put a debtor deeper in debt. If you’re going to use one of these programs, get referrals from people you trust and otherwise check them out thoroughly.

Credit Card Debt Consolidation Legal Help

There’s nothing magical about debt consolidation services. For example, you can often get a loan, including a home equity loan, without them. The value comes from having a trustworthy, knowledgeable, experienced credit card debt consolidation lawyer to guide and advise you. Consider an attorney with experience in debt reduction as an alternative to other counselors. Not only are attorneys ethically bound to put your interest first, but they can help you explore a much wide range of legal options, including potentially bankruptcy, than other debt counselors can.