3 Things You Should Know About Consolidating Your Credit Card Debt

Many card holders in America are slammed by credit card debt and the exploding debt continues to become a colossal. And these debt stricken consumers are finding it difficult to pay off the multiple credit card debts. In this situation, it will be beneficial to enroll in a debt consolidation program to manage and pay off your debts. Therefore, if you are not aware of debt consolidation program then this article will help you understand the entire consolidation process.

Know the basics of debt consolidation process:

Some credit cards have high interest rate so the accruing interest on the principal balance makes it unaffordable for the consumers to pay off. The cardholders find it difficult to remember the due dates and minimum payments of multiple cards. If you consolidate your debt, then your high interest debts will be rolled into one single convenient low monthly payment. You can also hire the services of a debt consolidation company so that you do not forget to make your payments. The company can negotiate with the credit card companies on your behalf to lower the interest rate on the principal balance.

What are types of debt consolidation available?

You can take out a debt consolidation loan from the bank or credit union. It will be easier to apply for a personal loan or you can also get a secured debt consolidation loan against the equity you have in your house. But it is advisable to avoid taking out new loan when you are working on paying off your debts.

Low interest rate:

You can pay off your high interest debt with a low interest consolidation loan. If your credit score is high, then it will not be difficult to find a low interest rate loan to eliminate your debts. The secured loans have low interest rate as you take out a loan against collateral.

Debt consolidation can be beneficial if you wisely manage the situation. But you should avoid spending recklessly when you planning to pay off the owed amount. If you take out a consolidation loan to pay off your existing debts, then you should be cautious enough to pay off your consolidation loan immediately after you eradicate your debts. It might be difficult to come out from the vicious cycle of debt if you fail to pay back your consolidation loan. So, you need to be sincere while handling your consolidation loan in order to regain your financial independence.

About the author

Kimberly J. Howard, CFP®, CRPC®, ADPA®

Kimberly J. Howard, CFP®, CRPC®, ADPA® is the founder and owner of KJH Financial Services in Newton MA and Denver CO. She enjoys helping clients explore and achieve their life goals through effective comprehensive financial planning.

Kimberly holds a Master of Science degree in Computer Science Information Management from Boston University. She earned a Bachelor of Science degree in Mathematics and Physical Education from Stephen F. Austin University in Texas. She attended Boston University for her Certification in Financial Planning and H&R Block for Tax Preparation Certification.

Kimberly is currently an adjunct faculty member at MetroState University where she teaches General Financial Planning Principles, Income Tax, Retirement Planning and Estate Planning. She is a past adjunct faculty member at Boston University and The College for Financial Planning.

Kimberly is a member of the Financial Planning Association (FPA) and The National Association of Personal Financial Advisors (NAPFA). She was named to the Metropolitan Who's Who Among Executive and Professional Women. She is an expert Advisor for Nerdwallet, BrightScope, Morningstar, and FiGuide.

Kimberly promotes a life planning approach with a balanced work/life style. She is active in sports including cycling, golf, skiing, and hiking.

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  • My wife and I have had some very high medical bills during the past 15 years. She is 77 and I am 79 years old. We have our home for sale, but not having any luck. Ware asking just what we owe on it. We owe approx. $60,000.00 in credit cards, plus house payment of $3,355.00 per month, plus approx. $730.00 per month of phone, gas, electric, etc.. We both get Social Security, I get a small pension, and we both work. My wife does some home health work and has 5 to 6 patients she sees every week but its getting harder all the time. I am a shuttle driver for a local car dealership, but just had wrist surgery and won’t be able to return to work for another week. We only have one car, which is paid for, but gas prices is really starting to hurt. It’s going to reach a point soon when we won’t be able to keep this up, and we will never be able to pay off the credit cards. What do you suggest for us? Who should we see to help us?

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