dating website for graduate students Consolidating high interest rate credit cards

Whether you should consolidate your credit card debt depends on your individual circumstances and the terms of the consolidation.

When you obtain a debt consolidation loan, you pay off all of your outstanding credit cards with its proceeds.This means that instead of owing money on multiple credit cards, you now have a single obligation.If your new monthly obligation is substantially lower, it usually means a longer repayment term.If your repayment term is extended when you consolidate, it may take you significantly longer to pay off your credit card debt.Typically this is how these companies work: Instead of obtaining a new loan to pay off your credit cards, the debt management company tries to negotiate with the credit card companies to reduce your interest rates or otherwise lower your monthly payments.

Each month, you make a single payment to the debt consolidation firm and it distributes a portion of your payment to each of your creditors.

When this has been done, you are responsible for only one payment, and don't have to keep track of numerous bills featuring different due dates.

Reducing the cost of your monthly debt service, by taking advantage of cheaper financing to consolidate, makes a lot of sense.

(To learn more about managing credit card debt, see out topic on getting out of credit card debt.) Consolidating your credit card debt essentially means combining all of your debt into a single loan or paying your creditors through a single monthly payment.

You can do this by taking out a consolidation loan or using a debt consolidation or management company.

If you can’t afford to pay off your credit cards, consider other alternatives such as debt negotiation (which can reduce the balance on your credit cards) or bankruptcy.