Benefit Card Consolidation Credit Debt

What is the benefit of using debt consolidation for credit card debt? I am trying to decide to either call the credit card companies myself and negotiate for a lower payoff/settlement amount, or to use a debt consolidation company? If I negotiate with the credit cards directly, will that be considered a charge off? I would want to settle myself if I can to avoid paying all the months of high interest. But if I use debt consolidation, then they will charge me a fee every month for so many years? What is their purpose? What would be the best route to go financially?

You have to make sure you have a reputable debt consolidation company. There are many out there that are not. I know that Consumer Credit Counseling is good because NCUA backs them and I have to work with them to coordinate classes for our members. The thing about debt consolidation companies is that sometimes they can get a better payment plan or rate because they have deal in place with the cc companies. Also, the credit card companies feel better because they know you are working with someone to actually pay down your debt.


You could also look into a consolidation loan through a credit union or bank. You have to look around and make sure you are getting a decent interest rate.

I think that you can get free consultations with the debt consolidation companies. This should tell you what the costs/fees would be. You can always try the calling the credit card companies first to work out a deal.

Good Luck!

2008-11-06 14:13:19 by Nik

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Being a recent grad and not in my prefered area of employment is rough, as it is for many recent grads. My dilemma is my finances. My poor financial decisions (i.e. CREDIT CARD DEBT) in college has caught up with me and it is racking my brain. I have considered debt consolidation because of the seemingly positive benefits of reducing my payments and paying just one bill...BUT is it too good to be true? It seems that there are quite a few debt consolidation businesses popping up and that is cause enough to sit up and really ask what's really going on. I mean, is it really good for my credit (as well as my mental well-being)? Am I better off just toughin it out or should I take the leap and just take a chance with a reputable debt consolidation company? What's a poor girl to do?

Don't go there. Call your credit card company and negotiate the interest rate. They will usually work with you and drop it way down as low as 6 percent if you are tough about it. Then pay off as soon as possible. Other wise you got a snow ball that will roll up bigger and bigger. Just use the rule of 72, what you do is divide the interest rate by 72. If it is 12 percent then 72/12 equals 6 and your debt doubles in six years. That means you got to get the interest rate down and pay it off with a dead line. Good luck!

2006-04-11 11:59:54 by missjones2you