Credit cards at first seem like they are your friend helping you out, making life seem easier. But be warned it is easy to lose control, a late payment or only paying off the minimum balance and then you start to wonder how you will ever pay off all the money you suddenly seem to owe.
There is an option of taking out a debt consolidation loan. But you need to act fast because every day that you delay you will be paying more interest.
On average most adults have four credit cards and if these are up to the limit it is easy to see how you can owe tens of thousands of dollars.
But is a debt consolidation loan right for you?
The Nature of Credit Card Debt
Many people find themselves in need of a debt consolidation loan if they have found the credit card a too tempting foe, allowing you a treat here and there. It is always there to pay for things that you want, from shopping to more elaborate items, even air plane tickets.
A loan can help in the beginning by changing the debt and giving you time to pay it off without it increasing any further. It will also be cheaper than what the credit card would have been.
But it will take will power not to end up in the same situation with a loan and more credit card debt.
Added Advantage of consolidation
There are even more reasons to pay of credit card debt by using a debt consolidation loan, it will help your credit rating, by paying off a debt it reflects in a positive light on your credit score, thus helping you in future if you need to apply for more credit.
You will be in a better position financially because you could reduce your monthly expenditure as the loan should be cheaper than the original debts you were paying.
Debt Consolidation Companies
There are two distinctly different types of debt consolidation companies. The first one is a lender that you approach directly and ask for a loan for a particular amount with the purpose of repaying previous debts. There is a limit on the amount you can borrow and that will depend on the lender.
The other sort of debt consolidation companies is where you approach them and they will sort all the problems that you are struggling with. You pay the company a set amount each month and this gets distributed to your various debtors. These companies will be charging a fee and this will be added on to your monthly payments potentially increasing your debt.
But the advantage of this type of consolidation means a third party is involved and sometimes they are able to reduce your debt owed or lower the interest rates. But you are making positive changes and the debt will be repaid.