Should You Consolidate Credit Card Debt?
You know most people will tell you that consolidating credit card debt
is the best thing you can do for yourself. Go to a bank or to a company
that specializes in debt consolidation and get rid of all of your credit
card debt because it is bad news for you.
However, you might not want to get rid of that debt just yet. There are
a couple of instances where you might want to keep that debt right where
it is. For starters, you want to look at the interest rates that the
credit card companies are charging you, and compare them to the rates
that you would get for a debt consolidation. If you have credit cards
with 0% or 4.9% interest financing, you are not going to want to touch
them. You could end up moving them to a debt consolidation that had an
interest rate of 9% or 11% and now you are paying more for your debt
than before.
There is also the idea of financial responsibility. More than one debt
consolidation client has consolidated all of their loans into one easy
payment only to find that they are now debt free on all of their cards.
This then leads to running the cards up again and being back in debt on
all of them. Only this time around it is worse because they have the
debt from the credit cards on top of the money that they put into the
debt consolidation, leaving them even further in the hole than they were
before.
As with anything there are pros and cons to debt consolidation and only
you know if you are responsible enough to do it. If you think that you
might get yourself into trouble again, get rid of all of your credit
cards and leave yourself with one for emergencies. If that one has a
high credit limit, tell your creditor to drop your limit so that you
can’t get yourself in over your head again.
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