If you took all your credit card debt as one dollar bills and stacked them on top of one another, how high with that stack reach? If you’re deeply in credit card debt, it might reach several stories high. Just looking at that stack of dollar bills that represent your credit card debt could just about give you a heart attack.
How to deal with serious credit card debt
Several good alternatives
When it comes to getting your debt under control, there are several good alternatives. One of the most popular is to work with a local consumer credit counseling agency. A counselor at one of these agencies will go over all your finances with you and help you develop a payment plan. He or she will contact your creditors and get them to agree to the plan. Once they agree, you will send the check each month to a credit-counseling agency, which will then pay all of your creditors for you.
A credit card debt consolidation loan
A second very popular way to get credit card debt under control is with a credit card debt consolidation loan. This can be either a secured or unsecured loan. They are available at most banks and credit unions and even on the Internet. Unfortunately, banks tend to be stuffy and as the old saying goes want to loan money only to people who don’t need it.
Credit unions can be a better place to find a debt consolidation loan but there may not be one in your area. Search online for one because they usually offer the lowest rates anywhere.
The pros and cons of credit card debt consolidation loans
While a credit card debt consolidation loan can be a good way to get your debt under control, it does have its negatives. For one thing, you’re not really eliminating your debts. You’re just moving them from one set of creditors to another. If you owed $15.000 before, you’ll still owe $15,000. But you will have more favorable terms, that is more time to pay back the loan. For example, if you were to get a second mortgage as a debt consolidation loan, you would probably have five to seven years to pay back the money .
Lower payments and interest rate
You will also have a much lower monthly payment and a much lower interest rate. And you will need to write just one check vs. the six, eight or more you may be writing now.
Not for everyone
Credit card debt consolidation loans are not for everyone. If you are totally over your head in debt and out of work, you may not be able to find any financial institution willing to loan you the necessary amount of money. In this case, you might have to take the ultimate step in credit card debt reduction and that is to file for bankruptcy. Call us to discuss your debt relief options with no obligation.