Credit Card Consolidation Versus Debt Payment – the Difference

Written by admin on April 12th, 2011

Credit card consolidation versus debt payment, is there really a difference? Typically the only difference is the amount you end up repaying after negotiating terms. What do I mean by that? Well, let me explain. Let’s say that for whatever reason, you are ten thousand dollars in debt, and you are starting to have trouble making all of your monthly payments on time.

You’re starting to receive those demoralizing pesky late notice calls and letters from your credit card companies. On top of that, they are charging you late payment fees, which are making your situation even more difficult. After three or four months of this, you decide it’s time to do something about it; mainly, because your situation doesn’t seem to be getting any better in fact it’s getting worse.

At this point you have a few choices here, but we’ll only focus on two of the possible choices, you can apply for some type of debt consolidation loan and consolidate your debt into one manageable monthly payment, or you can get help from a credit card debt consolidation service. Now since we are talking about credit card consolidation versus debt payment, lets say you opt for the second choice.

You search around and find yourself a reputable (emphases on reputable) non-profit debt consolidation service. What they’re going to do for you is this, they will assess your current financial situation and develop a spending plan for living expenses and debt repayment. Once that has been established they will contact all your creditors and negotiate new terms on your accounts. Most of your creditors will be willing to renegotiate the terms of your account and lower the monthly payment; they may even lower the interest rate.

Credit card consolidation versus debt payment mainly changes the terms and the amount overall you will end up paying for the money you borrowed. The balance of your debt, ten thousand dollars, will remain the same, but you may end up paying less money in interest over the life of the loan (be it credit cards or some other type of loan) and have a more manageable monthly payment.

To get the straight facts on debt consolidation, be sure to visit Free Debt Consolidation Info where you’ll find plenty of unbiased information on consolidate consolidation debt.

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