Do-it-Yourself Debt Consolidation
by admin on 05/10/09 at 1:35 pm
Credit card debt consolidation is a phrase that you probably hear a lot on television, but you probably don’t know a whole lot about it. Once you have a basic understanding of debt consolidation and how it is accomplished, you can, with a bit of effort, do the same thing yourself and get out of credit card debt today.
Most debt consolidation companies came to be because of the many challenges people face in today’s tough economy. Unemployment is continually rising, and prices of daily necessities are going up even as wages are decreasing. Because of this, many are forced to use credit for everyday spending, and they end up racking up high balances on more than one card. Combine this with interest and penalties, and it’s easy to see how debt can get out of control.
The purpose of debt consolidation is to put all of your credit accounts into one larger account. Then, you need to eliminate the credit cards by cutting them up and closing the accounts completely, and aim for a good interest rate on the master account. Thus, you will gradually pay down your balance. One way to do it yourself is to transfer your balance to another card company, one that offers a 0% interest rate on new loans. But, you need to be careful here, as there are sometimes hidden transfer fees that can be equal to or greater than the interest you would have been paying.
Whatever you decide to do, you need to learn some basic facts about credit cards . Be sure that you read the fine print on your new credit card agreement, because oftentimes the end of the “free” interest period means a greatly inflated interest rate. If they lure you in with a low teaser rate and then yank it way up, it doesn’t make much sense to do a balance transfer. This is by no means a complete guide to do-it-yourself debt consolidation, but it’s definitely a step in the right direction.
