Credit Card Consolidation Loans
Free Credit Card Debt Consolidation
Credit card consolidation loans (for that is what their use really constitutes) could be a great step towards financial freedom. In this article you will learn how to conduct your own free credit card debt consolidation.
Consolidating is taking all of your balances and transferring them to one. They are all then considered paid in full. The total amount is still owed, but now to a single lender. The benefits to this method is the simplicity it creates.
This "could be" a viable option if your attitude is eliminating debt, not simply deferring the problem to later. One bill, less hassle. It would seem to be a no brainer to go with this option.
The Hidden Costs
However, beware. Credit card consolidation loans can only work if the symptom of what got you here in the first place has been solved: overspending.
Offers by companies for consolidating credit card debt are in great supply and indeed very attractive. For what credit card consolidation loans do is lower the overall monthly payment (as a convenience of course) which means less is paid off each month. This results in more months to pay interest. This extra interest you pay for the convenience is how the loan companies make their profit.
You always end up paying more.
You need to put a halt to the actions and attitudes that got you to this point.
Symptom of the Real Problem
Having these many balances and not living debt free is merely a symptom of an overspending problem. Moving them into one payment, even at a lower interest rate, could give way to the false perception that the plastic which now have a $0.00 balance are "reloaded and ready for use". Stop that thinking.
All of those pieces of plastic that now down to $0 need to be cut, shredded, burned, etc., and the accounts closed.
Except in an emergency (being stranded somewhere), you should never use the one you have until it is completely paid off to a zero balance. It should then only be used once you have been making a budget for six months. And then only used for necessary things already accounted for in your personal budget plan. No, that "great buy" during the incredible sale is not an emergency or necessary. Sorry.
A Lifestyle Change
We are talking a lifestyle change here. One of financial freedom which causes you to live like no one else so later you can live like no one else. Life without payments, frustrations, hassles, or slavery. For that is what being in debt is in reality. It has been wisely stated thousands of years ago that the debtor is a slave to the lender. Do you feel that way sometimes, that whatever money you make is then immediately given to a creditor?
Is it time to stop it? Are you now ready to get rid of credit card debt? Good.
Proceed With Caution
So, what is the bottom line in all of this? If you want the convenience of one payment, save yourself a lot of fees, extra interest, and time to pay it all off, create your free credit card debt consolidation loan by doing the transfer thing yourself. Pick one that has the best terms, call them up to transfer your other ones to them. They will be VERY happy to assist you. You should be able to get a 0% interest rate for the first 6 or 12 months.
If, however, you do not believe you are disciplined enough for the credit card consolidation loans option, then I would suggest one of two other disciplined strategies: the Debt Snowball or Personal Financial Coaching.
This series on the best credit card debt help continues with a warning to the college bound about excessive credit card debt.
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