Credit Card Consolidation

Written by Kevin Tavolaro
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Sometimes credit card debt can get so out of hand that you can make regular payments without putting a dent in your balance. This can happen when your balance grows to a point where your minimum monthly payment only covers the initial interest. If you find yourself in this situation, you might be able to beat the cycle of increasing debt by consolidating your credit card balances.

Benefits of Credit Card Consolidation

You can consolidate your bills through a third-party credit counseling or debt consolidation agency. Debt consolidation involves combining all of your outstanding debts into one balance, against which you then make regular monthly payments. By combing everything into one bill, you can significantly reduce your payments, as all of your bills are then collected under a single interest rate.

This eliminates the numerous charges and fees that can keep your minimum payments from ever touching your actual balance. When you start to see your balance decrease each month, it can be very encouraging. You're much more likely to feel positive about your financial future, which often inspires former debtors to open savings accounts or pay more than the minimum balance each month.

Debt consolidation agencies might also intervene on your behalf with the card provider. An agency might be able to help you get an extension for a late bill, which can eliminate late fees. You might also be able to get a temporarily lower interest rate, until you've managed to clear a portion of the balance.

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