Credit Card Consolidation
Plastic, plastic, plastic - better than money!! Credit cards are a great convenience and, when used correctly, can be life-savers when emergencies arise or when there is enough income to pay them off each month. Unfortunately, with easy credit comes the temptation to become irresponsible and to engage in impulse and extravagant spending. Then comes the bill with that enticing minimum payment! Credit card companies rely on the majority of their card holders to make that minimum payment, because they make no money on those who pay the entire balance every month. So, they entice you more with increases in your credit limit, convenience checks to be used however you want, and cash advances at any ATM machine. So easy and so simple!
Trouble, Right Here in River City
Unfortunately, for a large group of credit card holders, the debt becomes so burdensome that the minimum payments can barely be made. If the spending has been totally out of control, even the minimum payments eventually can't be met. Then there are late fees and soaring interest rates added to already insurmountable debt. Those living in a dream world assume that someday, when they win the lottery or a sweepstakes, or the Prize Patrol comes knocking on their door, they'll pay everything off and life will be sweet.
Reality sinks in. There are no windfalls, and the phone calls are coming because payments have not been made. Sleepless nights, arguments with spouses and talk of bankruptcy
begin. Before you contemplate leaving the country or changing your name and social security number, think about debt consolidation, a logical realistic method of clearing up your mistakes.
Who Can Help Me Consolidate?
There are thousands of debt consolidation companies willing and eager to step in. But, be careful - as in any business, there are the good and the bad and the ugly. A little research on your part will turn up a number of non-profit consolidators who, generally, offer better opportunities for you. If you ask the right questions (What is the process? What is the cost? How long will this take? Can you reduce my total debt and my interest rates?), you can find one that will match your needs.
What a Non-Profit Will Offer
A good non-profit consolidator will offer the following services:
- Complete analysis of all of your debt and your average interest rate.
- Analysis of your income and debt ratio to determine the amount of over-extension.
- Negotiation with your credit card companies for a reduction in the total balance, forgiveness of late and over-limit fees, and reduction of your interest.
- The acquisition of a consolidation loan, either through their organization or a third party, with reasonable interest and, most important, a monthly payment you can afford.
- Development of a budget for your future, along with counseling about spending habits and pitfalls to avoid.
- Follow-up assistance to support your budget plans and spending behaviors.
A good non-profit consolidator will not see you as a short-term, one-time source of income. Rather, he/she develops a relationship with clients in order to insure that their plan works for the long-term.
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