5 Reasons Credit Card Debt Consolidation Fails
Don’t sabotage your own debt relief strategy by taking actions that can set you back.
Credit card debt consolidation can provide a faster, more cost-effective way to eliminate your debt. But it is not a magic bullet that works in all situations regardless of how it’s executed. You have to take the right steps in the right circumstances in order to be successful. Otherwise, your solution could potentially make your challenges with debt worse.
These are the five factors that can derail plans to eliminate your debt
|Why Credit Card Debt Consolidation Fails||The Bad Results It Causes|
|Interest rate is too high||Payments get eaten up by accrued monthly interest charges, which slows any progress, making it impossible to reach zero.|
|Repayment term is too long||Increases total cost, making debt elimination inefficient and increasing the chances you’ll drop off.|
|Monthly payments still don’t fit your budget||You can’t keep up with the payments, leading to default and collections.|
|You take on new debt too early.||If you start charging before you complete your consolidation plan, you end up with more debt instead of less.|
|Your situation changes, due to job loss or a medical emergency.||Any change in your income can prevent you from keeping up with your elimination plan.|