Unsecured Debt Consolidation

Written by Abby Luttrell
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If you're getting a lot of offers for new credit cards in the mail, you may be thinking that your credit report looks all right. After all, why would these companies be soliciting your business if you have a bad credit rating? Well, the truth is you'll get the solicitations anyway, whether you have a good credit rating or not.

High Interest Rates

And sometimes credit card companies will extend credit to you even if you have a less-than-perfect rating. Why? Because they want your business, and more importantly, they want your interest. An interest rate of 22% is almost 1/4 of your total credit card debt - if you pay it, you'll be giving them a lot of free money.

And once you start carrying a balance from month to month, the fees start compounding. Pretty soon it seems impossible to pay off the credit card. At this stage, you need debt assistance.

A credit counseling service will advise unsecured debt consolidation. Unsecured debt is the debt on your credit cards, and other loans that are not secured by collateral, such as a house or car. Unsecured debt consolidation will allow you to reduce the interest rates on your debt so that your monthly payment is manageable, and so that in time debt elimination is a possibility for you.


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