Consolidating credit card debt is an option for people who are having a hard time keeping up with their payments. As interest rates rise, many are experiencing a crunch as they try to stay current with their credit card and home loan payments. This problem occurs when people take on credit card and home loans at low rate levels, only to have those rates increased as a result of penalties or changes in the market.
Further, some people are living in houses which they can't really afford. As the housing market cools, people are finding it more difficult to sell their houses at a price that would allow them to pay off their mortgage. As they struggle to keep up with their mortgage payments, some rely on credit cards to pay for their day-to-day expenses like gas and groceries. In the end, they are left owing on their mortgage, as well as having to pay off increased credit card rates.
At this point, one's options are limited. Consolidating credit card debt is one way that people may regain control of their situation. They may do this through the use of a home equity loan, which would allow them to make a single payment every month on a loan with a much lower interest rate than those charged by credit card companies.
Another option is to consolidate credit card debt with the help of a credit counseling agency. A credit counseling agency may help to negotiate for a lower interest rate from your creditors. Credit counseling agencies may also help negotiate with creditors on behalf of their clients to settle their debts for a discounted amount, sometimes as little as half the total debt.
Credit card debt consolidation can be risky. One may end up paying on another unsecured loan with a tremendously high interest rate. While credit card debt consolidation is never the easiest solution to one's debt problems, it is often the only option for someone struggling with debt.