Do it yourself: Is a Good Idea?
Individuals become mired in credit card debt because they overspend and, probably, because they didn’t have a budget to work with every month. Once in debt, they are not sure what to do. One thing is for sure, people in credit card debt should acquaint themselves with the myths regarding debt consolidation. The following should help clear up some of the mysterious and questions concerning debt consolidation.
Everyone is talking about debt consolidation. It’s on the radio, television commercials, on the internet and in the mail you receive each day. It seems like such an easy thing to do -- just put all of your debt on one low interest rate credit card and begin to pay it off, right? Well, not exactly. Individuals become swamped with debt because they don’t have the financial discipline to put their credit cards away. If a person wants to consolidate their debt on their own, they have to begin by stopping the spending spree.
There are many reputable debt consolidation companies that can help people consolidate their debt and, just as important, guide them on how to better manage their money. These companies do charge a fee for debt consolidation but they also provide appropriate training and they insist that all credit card use stops. That’s right, no more using the credit card for things that are not necessary. If a person does decide to consolidate their debt on their own, they must research the few methods that are available to them.
Balance transfer: A person takes their total debt and transfers it to one low interest rate card. This sounds easy enough, but what happens when the low introductory rate doubles or triples after six months and the credit card debt isn’t paid off? Transfer the balance to another card and then another and so on. The problem with that is all this activity starts showing up on your credit report, and that’s bad news.
Home equity loan: This is a fair option but a person will be using their house as security, and no one wants to lose their home. They will also have to pay fees, such as appraisal and title insurance just to name a couple.
Personal loan: If a person has good credit, which might not be the case if they are wallowing in debt, a personal loan may work. Of course, banks are not giving out money to just any one. It has become very difficult to get a personal loan and the interest rates are not great. Credit Unions may offer lower rates but they are nothing to smile about.
These are just a few options for do-it-yourself debt consolidation -- there are not dozens of options for people who want to get out of debt. It certainly wouldn’t hurt to speak with a certified credit counselor. Before a person makes the phone call though, they should figure out their debt and how much money they bring in each month. They should also do some background investigation on a few credit counseling and debt consolidation agencies. Agencies are not all the same and some are simply frauds.
Debt consolidation takes discipline and the desire to wipeout the burden and the stress that debt brings. The spending will have to stop and the credit cards will have to go. Most credit counseling agencies let individuals keep one card for emergency use, but that’s it, emergency use only. There is no easy way out. When people spend uncontrollably there is a price to pay, and that price takes a physical and mental toll on them. Debt consolidation is serious business, but with the right focus, training and guidance, many people finally purge themselves of their debt.
Consolidated Credit Counseling Services has been helping consumers pay off credit card debt since the early 1990s. Call 1-800-320-9929 to speak with a credit counselor about your credit card debt and find out if debt consolidation is right for you.
