Unless you’re different from most of us, your credit card debt probably just crept up on you one credit card charge at a time. As an example of this, I read an article recently about a couple that had run up $120,000 in credit card debts. They said they had done this the “boring way” or one charge at a time. They said if they saw something for $200 they wanted to buy, they just bought it – without ever thinking about the consequences.
Their story did have a happy ending in that they were able to become completely debt-free in about five years, though both of them had to take second jobs in order to accomplish this.
Credit card consolidation
While credit card consolidation can’t do anything to reduce your debts, it can be a good way to get them under control and achieve some peace of mind. But it’s important that you do it right.
If you’re feeling really stressed out about your debt, your judgment can be clouded and you could do something you end up really regretting. There are many debt consolidation offers available out there but some can be outrageously expensive or downright frauds.
The first thing to watch out for in debt consolidation is debt counseling firms that offer to lend you money to help pay off your debts. You might be able to get a loan from one of these companies but it could come with a very high interest rate and you may have to secure it with your house. You could be risking your home because if you were to ever miss payments on the loan, your home could go into foreclosure and you’d be both out of luck and possibly out of a home.
Loans from a finance company
You may have seen ads from finance companies offering debt consolidation loans that sound like they could be the answer to your prayers. However, in most cases they are not. Loans from finance companies generally come with high interest rates and exorbitant fees. Plus, getting a loan from one of these companies can actually damage your credit record.
No questions asked
You also need to be careful about lenders who promise that they will make you a big loan with no questions asked but, in exchange, want a huge upfront fee. The fact is no ethical lender will make such a promise. These disreputable lenders will probably not only charge you a very high interest rate on the money you borrow but may even put a lien on your home or some other asset.
Companies that say they will negotiate a debt consolidation loan for you
You should also be careful about these companies. They say they will negotiate a loan for you and use it to pay off your creditors. You start sending them money each month to repay the loan but the company either doesn’t get the loan or doesn’t pay off your creditors. You pay the company every month while your credit report is being damaged even more and you’re probably being charged interest and late fees on those unpaid debts.
A better solution
We have debt consolidation providers that do consolidation right. For one thing, they charge no upfront fees. For another, they offer a 100% satisfaction guarantee – if you don’t like any of the consolidation plans you’re offered, you can simply cancel at any time and pay no fees or penalties.
Call us today to learn more about credit card consolidation done right.