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How to Consolidate Credit Cards and Get Out of Debt

At Care One, we know there is no single reason that people rack up credit card debt. While some people are relying on credit to live extravagant lifestyles, most people buried in credit card debt are there because of a crisis. We know because we’ve been there before.

Divorce, medical emergencies, and job losses are all common ways that people fall into debt through no fault of their own. While credit cards offer a way to continue purchasing the essentials when no cash is available, at a certain point, many people find that they have thousands of dollars of debt accumulating interest every month and they can only afford to pay the minimum monthly amount.

This is when things get really scary.

As debt continues to build, even the monthly minimums become too much to pay. The worst thing is, the building interest on your credit cards means that your debt keeps growing even if you cut up your cards. At this point, things can seem hopeless.

But you do have options. You can get out of debt.

Keep reading to find out more about two popular options for how to consolidate credit cards and get out of debt once and for all!

Options for How to Consolidate Credit Cards

Debt Consolidation Loans and Debt Management Plans are two ways you can become debt-free even if you have already tried budgeting and paying down your cards on your own. If you need extra help, these options might work for you.

How to Consolidate Credit Cards with a Debt Consolidation Loan

Consolidating your debt is useful when you have several high-interest credit cards open. In a nutshell, you take out a loan in order to pay off the high-interest rate cards.

But isn’t that kind of like borrowing from Peter to pay Paul? Remember, the point is to stop the high-interest rate cards from growing out of control. So in order to make a Debt Consolidation Loan effective, you would need to find a loan with a low interest rate.

Most of the time, those low-interest rate loans are only available to people who have good credit. If you’ve accumulated a lot of debt that you aren’t able to pay off on your own, then it is likely that you don’t have perfect credit and may not be qualified for a loan at all.

You can still get a loan with a reasonable interest rate, but you will likely have to secure it with property, such as your home. Secured loans of this kind are very risky - if you don’t end up being able to pay off the new loan, the bank could seize your house. While you may be able to find an unsecured loan with bad credit, the bank or organization you get the loan from will have to charge you a lot of interest because you’ll look like a risky investment.

One more thing to consider is whether you will be able to resist the urge to put more purchases on your credit cards once the new loan frees up their limits. It might be a good idea to cut the cards up so that you aren’t tempted to do so.

Everyone has different circumstances, so what do you do if a Debt Consolidation Loan is not the best choice for you? Debt Management Plans are another option that will work for a lot of people trying to consolidate their credit cards in order to get out of debt. Keep reading to learn more about Debt Management Plans.

How to Consolidate Credit Cards with a Debt Management Plan

An alternative to a Debt Consolidation Loan is a Debt Management Plan. Debt Management Plans may give you the same benefits of a Debt Consolidation Loan through a bank — one monthly payment and reduced interest rates — but work regardless of your current credit score.

Debt Management Plans works like this:

  1. You get in touch with a trusted debt relief agency. Always verify their BBB rating before signing up.
  2. You then talk to a debt relief organization who will guide you through the process
  3. The agency will negotiate on your behalf with your creditors for lower interest rates and waived late fees
  4. Remember, there are no upfront fees so you don’t pay until they have finalized negotiations on your behalf. You will then make one payment each month through the debt relief agency and they will take care of disbursing the funds.
  5. The credit counselors will help you prepare to make your monthly payments and make sure the schedule for going debt-free is feasible for you
  6. Once you complete the Debt Management Program, you should be debt-free!

With a Debt Consolidation Loan, you are on your own, with Debt Management, you have a partner to help you achieve your goals and make sure that you get out of debt and stay out of debt.

To get in touch with a fully accredited Debt Relief Agency to help you consolidate your credit cards, call CareOne today at 1-888-888-CARE, or contact us online. You can get a free, no-obligation consultation with a specialist to see what options make the most sense for your individual situation.

You have nothing to lose, and you could be taking the first step towards getting rid of your credit card debt.

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