What Is Credit Card Debt Consolidation?

Credit card debt consolidation can be invaluable for anyone who has too much unsecured debt not just on one or more credit cards but perhaps consumer loans medical bills and store credit cards. The program has the advantage of giving you lower monthly payments and participating in such a program also stops your creditors from calling you and writing to you all the time requesting payment.

Debt consolidation is offered by many different mostly not for profit companies although once you agree to participate the process is much the same regardless of the company you use. In addition almost all credit card companies participate in debt consolidation although they are not obligated to. They would rather have a customer who is struggling to pay the credit card bill every month pay a lesser amount than simply not pay anything and get further behind.

Once you agree to participate in a debt consolidation program the company will contact your creditors on your behalf and negotiate lower interest rates and lower monthly payment amounts. This also has the big advantage that you don’t have to deal directly with the credit card company. Once they have successfully worked out lower rates you make one payment each month to the consolidation company that you are working with; the company then disperses the amount between your creditors depending on the how much you owe.

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Most credit card debt consolidation companies will provide you with a monthly statement so that you know how close you are to your goal of paying off all your unsecured debt. In addition you can often choose to have the amount debited from your bank account meaning that you don’t even have to write a check each month. However it’s important to keep up with the payments and make sure that you pay them on time; if you are late or skip a payment the debt consolidation company may well refuse to work with you.

Although debt consolidation wont take care of all your debts if you owe too much on your credit cards it can be an easy and affordable way of paying the cards down. It also looks better on your credit report than not paying at all or declaring yourself bankrupt. If you are struggling with credit card payments that you just cannot afford to make it is definitely worth looking into although you should make sure you are working with a reliable company. See here for more additional information.