Credit card debt can be frustrating, and if you are currently experiencing it, you can rest assured that you are not alone. About 61% of American citizens own a credit card with an average balance of $6,194. Without a solid debt management plan, you will probably end up carrying a balance on your card and putting yourself in danger of a debt snowball.
There are many ways to pay off credit card debt, but all of them require patience, time, and discipline. From credit card balance transfer to requesting a repayment term at a low rate to borrowing money from another source to taking out another loan for debt consolidation, there are different ways to approach debt settlement and paying off your credit card balance. Credit card consolidation can’t be carried out without a precise debt management plan, and that is why most individuals prefer turning to counseling agencies, rather than handling the issue on their own. Both options offer the same possibilities, but it is not easy to get lower interest rates if you are tackling debt consolidation on your own.
The personal approach
Many consumers in America own more than a few credit cards. Usually, that number is around 8 cards per consumer, so handing credit card debt consolidation on your own can be quite a task. The “do it yourself” mentality is great if you have the nerves and time for negotiations, but most people don’t have the expertise needed. In order to lower your interest rates, you have to go back and forth with your creditor or bank. Keeping an open dialog can become exhausting if you are tackling multiple creditors at once, keeping a debt management plan in place, and making all the payments on time. These are just a few of the many reasons why most consumers reach out for professional help from debt consolidation companies.
Consolidating credit card debt with professional help
This option serves as an all-in-one solution for individuals that want to consolidate credit card debt. Rather than doing everything on your own, a consolidation company will help you draft a debt management plan. These companies have the required financial literacy to come up with a budget structure for you that will keep you disciplined in a way most people would benefit from.
It is important to know that these companies don’t just offer debt consolidation loans. They will open negotiations with your card companies, and based on the results of those negotiations, you will be offered a few payment options. The main benefit of these services is transparency and a clear plan to pay off debt. All of your monthly payments get combined into one easy payment in an effort to consolidate your debt in the most efficient and easy way possible.
Pros and cons of debt consolidation companies
If you do consider acquiring professional help, it is very important to understand the benefits of a good consolidation company. You can get a lot out of consolidation lenders if you know what they have to offer. The first thing you should know is that a personalized loan pays off your debt completely, even if you are only managing to make minimum payments on your monthly bills. This is manageable, thanks to a clear budget structure that will be set by your consolidation lender.
Credit counseling is a feature offered by many accredited debt consolidation companies, and you should consider using it. The first step to debt relief is proper counseling that will help you understand the root of your problem. You will be given very useful financial advice that you will need to respect if you are serious about paying off credit card debt completely.
Late payments can become a thing of the past, but you can also expect fixed rates that are lower than you are paying right now. By negotiating your credit card debt with your creditors, a debt consolidation company can outline a payment plan that involves lower interest rates as a result of good negotiations. This means that your monthly payments could become lower than what you are paying now, with a clear debt relief plan on top of that. It is only a matter of choosing the right loan option. Usually, origination fees range from 1 to 6 percent, but some lenders do not charge these fees at all.
Since personal finance is a big concern for most Americans, it is no wonder that you will probably encounter a few scammers along the way. This is one of the few cons that debt consolidation brings with it, and this is also why you have to keep your eyes open when examining your options. Lower rates don’t always mean that you are making the right choice. Their reputation and accreditation should always be taken into account. Make sure that you have gathered all valuable information before you trust a consolidation company with your credit card debt.
Both options are viable, and both require patience and determination
In order to consolidate debt, you can come up with your own payment structure, or you can consult with professionals. With all the pros and cons out of the way, it is time to consider the long term effects of these choices.
If you choose to consolidate credit card debt on your own, you need to be prepared for the whole process. Coming up with a top debt consolidation plan is hard but manageable. Patience and persistence is a bigger problem you will have to face because you can’t become debt-free without strict rules and dedication. A late payment isn’t an option.
Consolidation loans open up more opportunities and offer more flexibility. Consolidating debt into one easy payoff plan is definitely an easier way to deal with your personal finance, and that is why it is the most popular choice with consumers. In almost every single case, the consolidation period doesn’t last more than 5 years. All of your bills are managed by your creditor, and once the payoff plan is completed, you will be completely free of your credit card debt.
Whatever option you may choose, you should remember that counseling is free with most reputable debt consolidation companies. If you need more information and want to know what option is best for you, don’t hesitate to request a consultation.
