More than 15 million people in the United States alone are deep enough in debt to be considered financially fragile. When credit card debt is so great that it starts to impact the ability to afford life's staples such as housing, food, electric and transportation, it is time to take a look at viable solutions to alleviate that debt. Consolidating credit card debt into one loan is an option that many people turn to in these circumstances. But for the majority of consumers who need to do something to resolve their debt issues the answer is usually a resounding: YES !! And here are some reasons why:
It is definitely easier to keep track of one payment a month verses eight or ten. It is also a quick repair of your credit report. Your eight or so creditors will immediately show a paid in full status and if you keep up on the consolidation loan your credit will continue to stay in good standing and improve month after month. Letting is go past due however, would defeat the entire purpose of getting the loan to begin with.
One of the mistakes that consumers make when they are interested in the "one payment pays all" prospect is a lack of understanding of the terms they are signing up for. If you deal with a reputable company, most of this risk will go away. Check out who is the best company for you to deal with by checking with the Better Business Bureau or deal with a company that you have a history with or has a local reputation that you have heard about from others.
Shop around for the best terms you can get. There are many companies that offer this service. As long as you can validate their reputation and business practices, you might be able to get a better rate with a smaller company that truly wants your business and will meet you halfway with a slightly more advantageous rate.
One caution: Many times when you are paying off credit card debt and need to do so through a loan, the amount of the loan will be difficult to approve even for those with good credit. When these loans are made, it is usually with a higher interest rate than the norm. But often times still a lesser rate than some of your debt. In other words, you can still be saving money.