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If you’re one of the millions of Americans with overwhelming credit card debt, you may have looked into a credit card consolidation loan to tackle your debt. And while a consolidation loan for credit cards can be a good option when you have a lot of bills to pay off, there are plenty of alternatives to consider. Each has its own pros and cons.
In addition to consolidation loans for credit cards, some of the most popular methods to pay off bills include:
In addition to those, you may want to consider either a Debt Management Plan (DMP) or Debt Settlement Plan (DSP), both of which can help you get out of debt now and develop strong money management skills for the future.
Review your current financial picture and goals with a financial advisor or specialist certified credit counselor to determine the best plan for your needs. Before you do, let's take a look at the pros and cons of each option.
With a credit card consolidation loan, you work with a lender to combine all of your unsecured debt into one monthly payment. The lender will pay off your credit card bills, and in exchange you’ll enter into a loan agreement with the lender to pay back the money. For a credit card consolidation loan to be worth your while, you’ll want a plan that offers a lower interest rate and/or lower monthly payments than you’re currently paying to your creditors.
As analternative to a credit card consolidation loan, you can work with your creditors and your budget to develop a plan to wipe out debt on your own. You might pay down your debts through a balance transfer or interest rate negotiation. Both put the control in your hands, which can be good or bad, depending on how disciplined you are. Remember, you’ll need to not only put together a budget, but stick to it as well.
With a balance transfer, you’ll move credit card debt from all cards onto one existing or new credit card – ideally one with an introductory, interest-free or low interest rate offer. You can search for the best offers online or review offers you may have received in the mail.
On the other hand, an interest rate negotiation is an agreement with your creditors to lower the interest rate on your credit cards. You’ll contact each of your creditors to request better rates on your open accounts. It’s helpful to mention competing offers or plans that you’ll consider if your creditors don’t seem willing to work with you.
As with any financial goal, whether you choose a credit card consolidation loan or other payoff method depends largely on your current financial situation, including your existing debts, whether you can afford your current monthly payments, the interest rates you’re now paying to your creditors, and how quickly you’d like to pay off your bills.
Providers of CareOne Debt Relief Services offer two additional options that may be beneficial if you’re looking to consolidate credit card debt and pay off bills.
A CareOne Debt Management Plan (DMP) helps you pay off debts by consolidating your bills into one simple, monthly payment – often with a lower interest rate than you’re currently paying to your existing creditors. The DMP includes comprehensive debt counseling, customer service, and financial education – all designed to teach you smart money management skills to help you stay debt-free for life.
With a Debt Settlement Plan (DSP), CareOne will negotiate with your creditors to pay back a portion of your existing debt. This is a good option if you have more debt than you can pay down. It’s important to note, however, that a DSP will have a negative impact on your credit. As with the DMP, you’ll also receive financial education to help you get and stay out of debt for the long term.
Learn more about debt relief plans offered by CareOne. Visit the CareOne community forums where consumers facing similar challenges as you share their experiences with credit card consolidation loans and other plans.
A debt consolidation loan can be a great tool for people with bad credit to help them get their finances back on track. By combining your existing bills into one new, monthly payment, you’ll be able to pay off most of your debts and work on becoming debt-free for the long term. But if you’re one of the many consumers with bad credit, you may be wondering whether you even qualify for a consolidation loan.
If you’re struggling with debt – as many consumers are – you may be looking for a way to pay off your bills and get back on track financially. Debt consolidation loans for bad credit profiles are one way to get out of debt, but you may be wondering where to look if you’ve been turned down by your bank or credit union. Before you go down the wrong road, take some time to realize there are choices for you, regardless of your credit history and financial situation
Because of the economy, millions of people across the country are looking for debt help. If you’re one of those millions, you may be facing overdue loans, calls from debt collectors, and increasing late fees and interest rates. In many cases, the best way to get rid of these debt problems is to work with professional debt-relief provider.
Nobody enjoys paying bills, but if every mail delivery brings more demands for money, the bills are mounting up in a pile, and you’re juggling the debt you already owe with new expenses arriving every day, it’s time to take control and reassess your approach to paying bills.
Making the decision to consolidate your bills with a debt relief plan shouldn't be taken lightly. Despite the proliferation of ads marketing the benefits of bill consolidation, many consumers find that they're able to save time and money by paying off their debts on their own. However, if you're in over your head, a bill consolidation program is one option that can help you get out of debt and plan for your financial future.
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