Are your credit woes getting the best of you? Are you getting more than three credit card statements in your mailbox each month? How about your inbox? Are creditors overwhelming your inbox too?
Choosing the Best Credit Card Consolidation Plan for You
Please try not to be too difficult on yourself. The fact that the majority of Americans are properly managing their credit card debt should not discourage you. Instead, it should relieve you to know that there is hope for managing your debt. You can also look for professional credit counselling services in Toronto.
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Obviously, the safest, most effective alternative to debt consolidation is to stop charging more to your card than you can afford to pay off each month.
If after reading this article you are considering debt consolidation, please be sure to ask yourself the following when considering the best plan for you:
1) Will the debt consolidation plan offer a lower interest rate than what you are paying now?
2) Does the debt consolidation plan offer a fixed interest loan, as opposed to a variable interest loan?
3) Will the consolidation plan improve your finances and help you save money?
Methods of Debt Consolidation
Generally, there are two methods for consolidating your debt. The first, slightly more popular, method of debt consolidation requires the consumer to consolidate their debts, typically those with high-interest rates, into a single low-interest card, home equity loan, or 401(k).
The second method involves a debt-counseling agency negotiating with your creditors on your behalf to combine your unsecured debts into a single monthly payment. Under a debt consolidation plan, you are required to make one payment each month to the debt-counseling agency. Your payment would then be distributed, according to the terms of your consolidation plan, to all of the creditors included in your consolidation plan.