Unsecured credit card debt consolidation refers to the process of consolidating all of the credit card debt that you owe into just one monthly payment without having to put up any of your assets as collateral. While it sounds great, there are some negative aspects of the unsecured credit card debt consolidation process. In fact, not being careful can make your financial circumstances worse after the process is over with than it was in the first place.
Consider the following options for getting unsecured credit card debt consolidation and the possible dangers to watch out for during the process.
Transferring a Balance to a New Credit Card
You may get offers like this in the mail all the time and they really are not a bad offer except for the fact that you are taking on yet another credit card to do this. This way of unsecured credit card debt consolidation will offer you something like a book of checks that you can write to other credit card companies and consolidate that debt under your new card. To make it more attractive the new credit card company will usually offer 0% interest on all transferred balances which is a great help.
This method is only advantageous if you are able to stop yourself from using you new credit card for any purchases. This option for unsecured credit card debt consolidation can be good for you if you are careful to not add to your debt by charging purchases to your new credit card. You can eliminate this danger easily by cutting up your new card.
Consolidating Debt by Means of a Finance Company
This method of unsecured credit card debt consolidation is definitely the least attractive because the interest rates that a finance company will charge are sure to be around twenty-five percent annually. That interest rate is almost certainly higher than the ones that you would have been paying on the credit cards you owe money on. Finance companies consolidate your debt by combining the principal on all the credit card accounts you owe and then making a ten year plan for debt elimination.
Transferring the balances of your credit cards to a new card is much preferred over taking out a ten year loan with a twenty-five percent interest rate with a finance company.
About the Author:
Is your debt stressing you out? Do you have a list of things you would do if you weren't putting all your money towards your debt? Learn how you can legally eliminate debt on the Debt Smackdown website. Visit http://www.debtsmackdown.com for more tips & advice.
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