Credit Card Debt Consolidation

What Is Credit Card Debt Consolidation

It is a process in which all credit card debt is added together in order to make one monthly payment.

Credit cards have revolutionized buying habits since the first one was released in 1950. They allowed consumers to buy items on sight which were not usually affordable. The credit limits sometimes even surpassed their own personal savings.  For the first time, purchasing convenience came in vogue. No need to carry wads of cash. And no need to stay within a strict monthly budget.

On average, American households have 4 credit cards or a total of 13 payment cards including store cards and debt cards. Statistical analyses tell us that the average credit card debt per household per month is $4,800. This has caused 1.3 million card holders to file for bankruptcy in 2003. And this trend effects all of us to one degree or another. When retirement time rolls around, most Americans can only expect to receive about one-third of their annual retirement income because of debt payments.

So you can see you are not alone if you are facing this dilemma. Every month, over half the households in this country run into problems meeting their minimum credit card payments. This, in turn, causes them to sink further and further into debt. Maybe it is time for all of us to evaluate our debt.

Consolidation Benefits

Naturally, if you consolidate your debt, you will no longer have to worry about managing payments individually. Additional benefits include:

1.  Reduction of interest payments
2.  Waiver of late and overtime fees
3.  Lower monthly payments
4.  Get debt relief in a shorter period of time
5.  Improve your credit rating
6.  Have the ability to save more money

There are several interchangeable terms used for credit card debt consolidation -- debt consolidation loans, debt reduction, debt settlement, debt negotiation and debt counseling -- to name a few. There are two main options of card consolidation that can be used. Take time to understand these options and choose the one that best suits your needs. Be assured although it is not easy and will take some time and perseverance, you can get out of debt and get your good credit back.

First, contact a credit card counseling firm. They help by consolidating all your monthly payments into one and dispensing these payments on your behalf to your various creditors until the entire debt has been satisfied.

The second type of consolidation is through a home loan or home equity loan. This is accomplished by exchanging an unsecured debt such as a credit card for a secured debt. Secured loans are backed by any specific acceptable asset such as real estate.

There are debt consolidation scams out there. Do not become one of their victims. Make certain that you do your research. Find out all the information you can about how you can legally consolidate any credit card debt you have.

For more information about credit cards, see:

Credit Card Rate - Shop Around Get Best Rates
Secured Credit Card - A Path to Credit Repair
Credit Repair - Best Ways to Better Credit
Building a Better Credit Report - Valuable Information from FTC