Even if the consolidation reduces your monthly payment, you still have to pay off all of your debt.
So if you don’t have regular income or can’t afford your monthly payment, consolidating your credit card debt will not help you get back on track.
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.
Call (800) 565-8953 to speak with a certified credit counselor or Start online credit counseling.
Are you looking to consolidate your credit card debt payments without taking out a new loan?
We work with your creditors to get you debt relief now, in the form of lower interest rates, waived credit card fees and lower credit card monthly payments.
With more of your monthly payment going toward debt balance, you can dramatically lessen the time it takes to become debt free.
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 you are struggling to pay off multiple credit cards, consolidating your debt may allow you to reduce your interest rates and lower your monthly payment.
However, a lower monthly payment can mean a longer repayment term and more interest paid over the life of the loan.
(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.