Top 3 reasons to Apply for Credit Card Consolidation
Are you having a difficult time keeping track of all your monthly billings? Credit card bills can especially hurt you because they slap late payment penalties on top of your interest rates which are higher compared to secured loans. Then you should consider credit card debt consolidation to combine all your bills into one loan. That means you only receive a monthly statement for a fixed amount of payable. This is a perfect tool if you have multiple credit card bills that are generating high interest rates and already placing your household budget on a huge burden.
Cut down your interest rates
Credit cards are good for emergency situation. But if you don’t manage your finances efficiently, they can put you on a very bad situation. By applying for a credit card consolidation from a reputable and accredited company, you can restructure your obligations to make payments easier. For instance, after negotiations, all your creditors agreed to cut down your interest rates and from a combined 15% to just 10%. If you owe a total of $10,000 on all your credit cards, that means savings of $500 each month. You can use that money either to speed up the payment period or spend it somewhere else.
You must remember, however, that credit card debt consolidation doesn’t mean all your obligations are cleared. The right term is reallocation of your debts so you can save a little more for your household expenses.
Keep track of your bills easier
As what have been said earlier, you will now have an easier time remembering the due date for your payment. This will prevent you from incurring more late charges and fines if you default or even if you are late for just one day from the scheduled date of payment. All these fees and charges accrue over time and will further bury you in a heap of debt. Through the credit card consolidation program, you can also get freedom from debt much faster than just paying the minimum amount stated in your monthly bill.
Avoid further damaging your credit score
All these penalties and default payments are reflected in your credit score. A badly damaged score will impact on the amount of loan you can get in the future, if the banks are willing to give you a loan at all. Make no mistake about it, applying for credit card debt consolidation will affect your score but it will eventually improve if you are up-to-date with your payments. Once you settle all your debts, your debt consolidation company will request the creditors to give a good word on regulatory bodies to positively impact your credit scores. A good bonus is a workshop on how to better manage your finances so this kind of problem will not crop up again in the future.
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