4 Points To Keep In Mind While Consolidating Your Credit Card Debt
Are you someone who is spending sleepless nights wondering about his surging high interest debt level? The Americans share a love-hate relationship with their credit cards; while they love to swipe them during every purchase, they hate them when they misuse their cards and start racking up debt that carries outrageously high interest rates. Plastics always seem to be bliss but life in plastic is not always fantastic! Whipping your plastics while making every single purchase is a big financial blunder and hence when you accumulate debt, it is nothing surprising. Nevertheless, even when you accrue debt, you need not fret as there are debt consolidation options through which you can put an end to your financial woes. Debt consolidation options are many and therefore you need to check out some important points before you take the plunge into the debt consolidation bandwagon.
Debt consolidation is not the ultimate solution: If you think that once you’ve taken the decision to consolidate your debts, you’re free to slide back to your old financial habits, you’re grossly mistaken. Unless you become responsible enough and stop overspending, debt consolidation won’t help you in any way. Therefore, when you’re already enrolled with a debt consolidation program, you should keep saving money, stop using your credit cards and also avoid overspending lest the debt relief option only helps you delay the inevitable, i.e bankruptcy.
Check the fee structure of the company: The fee structure of the company is yet another important point that you need to check before you sign up with the company. As per the FTC rules, no for-profit debt relief company should charge any advance fees from the debtors before they reduce a portion of their debt amount. Thus, if you come across such a company that charges huge fees from the debtors, you should be sure that they’re trying to scam you and you can even complain to the FTC.
Read the fine print of balance transfer agreements: If you opt for balance transfers, you shouldn’t forget to read the fine print of the card as the most vital information is included there. If you make the mistake of forgetting to go through the fine print, you may suddenly be subject to outrageously high interest rates soon after the completion of the introductory period. Know everything if you wish to avoid being cheated by the credit card companies.
Late payments will hurt your score: Once you sign up with a debt consolidation company, you should forget making late payments. They say that debt consolidation doesn’t hurt your credit score but when you miss payments even after signing up with a debt consolidation firm, this will trash your credit score. Therefore, make payments on time to protect your credit score.
Therefore, when you’re about to seek the help of credit card debt consolidation, you should consider the above mentioned points. Ensure taking the right steps and completing the process successfully.
Filed under: credit card
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