The Why and How of Credit Card Consolidation

When you know you are in financial difficulty, the very first thing is to order a free credit report. You can get this on many sites.

Depending on what you find in your credit report, credit card consolidation may be an option open to you. If you still have good credit, you may be able to qualify for a loan to consolidate the debt into one place with a decent interest rate. The first avenue is (honest to goodness) going to your local bank and asking if they will make you an unsecured loan. Sometimes this works. If you still have equity in your home or other property, you can apply for a HELOC (home equity line of credit). The rates on these are very good right now. You could also hit up mom or dad if they are sympathetic (and rich).

Many people can not qualify for these kinds of loans. Then a sensible solution would be to consult with a legitimate credit counseling agency. These people add all of your credit up, determine a single monthly payment you should make, and then dole the funds out each month to the credit card companies. Just be sure you get a good, non-profit agency that will not charge you a large fee and then not do the work.

A good company will counsel you on your budget, housing expense, and debt management. Their program will bring your cards current, eliminate late charges, and (sometimes) reduce interest rates on your cards.

And then, be sure to chop up all those cards into itty bitsy pieces.

Source by Linda Servis

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