Credit Card Consolidation Service

Using a credit card consolidation service may be the only way a person has of extricating himself from an ever growing problem that might turn into a full-blown life crisis. Plastic charge debt sits at about nine hundred and seventy billion dollars for American consumers. This translates into about twenty nine hundred dollars for every person in America. Within those figures are those who have no charge card accounts, those who pay off the balances every month, those who have no trouble paying their monthly installment amount and those who are suffocating in unsecured loan debt. Until recent bank failures, charge card accounts were as plentiful as fruit flies on a nine day old banana. Undisciplined borrowers often got new cards to pay for already existing credit accounts. Then rising fuel prices, spikes in grocery items and other everyday purchases slammed these tightrope walking consumers in the face and desperation has ensued.

For many of these consumers, all avenues of loan consolidation are closed. What would have been a fabulous means of covering this unsecured debt, a home equity loan, was used for large ticket items such as boats, cars, vacations, college tuition or other purchases. Financial experts highly tout the use of these low interest APR loans for last resort solutions to high interest charge account debt. But with that availability gone some consumers have looked at loan company lending possibilities but have found that their interest rates are very close to charge account rates so nothing has been saved, let alone solved. The next step then is hiring a credit card consolidation service to provide the answer to their heavy burden.

These services are located online and in many mid to large towns and cities. Many are actually called agencies and have the term "non-profit" tied to their name. In these instances, certain amounts of trust is often attached to their services, but make no mistake, non-profits are allowed to make a profit. Any credit card consolidation service that a consumer uses has developed a relationship with most charge account lenders across the country. In fact, with the exception of payday lenders which will not cooperate with a credit card consolidation service, any unsecured loan, that is, any lending agreement that does not demand collateral will probably be within the consolidation service's bailiwick. God has promised in His Word that those who do not extract usury (high interest on loans) shall be blessed. "He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved." (Psalm 15:5)

A credit card consolidation service is kind of like a big old friendly dog that doesn't care about how much money a person has, what kind of car a person drives, or whether he has a southern drawl or a Northeastern clip. The dog is just glad to see the person and so is the consolidation service. In many cases, these agencies' missions are to help not only relieve the pressure the client is under but also to educate the customer in ways to keep the same crisis from happening again. The service will ask about income and all debts including installment loans and mortgage amounts. Additionally the service will often want to know how much is spent each month for utilities, groceries and other common items in order to know how far to go with each lender in negotiation. The idea is provide real relief for the client so that the program will be a successful venture. Sadly, only forty percent or less of clients stay with these programs until all debt is gone, often due to the uncommitted nature of the client.

Typically a credit card consolidation service can get unsecured debt payments cut in half by lenders. By doing this, the consumer begins to have breathing room and the ability to see light at the end of the tunnel. The goal of the credit card consolidation service is to help the client be out of debt within three to five years, but all of that could be even quicker if the debtor would place some of the newly found extra cash on the monthly payment as well. All payments go first to the consolidation service where a service fee is deducted and then to each lender, and the lender sends an account summary to the client so the progress can be monitored. Remember that installment loans are usually not qualified to be lowered.

Now everything is not sipping root beer floats while on a Sunday afternoon cruise down the lazy river. If a person has ever used a credit counselor before he will most likely not be qualified to use them again; this reality being brought to you by the lenders and not the credit card consolidation service. The other much bigger issue is the very negative impact on a person's credit history and score that can occur as a result of using a consolidation company's services. If a person looks carefully at the provisions of chapter thirteen bankruptcy and consolidation plans, which are almost identical from company to company, the similarities are startling. And a bankruptcy on a credit history is like painting a bulls-eye on male deer during Pennsylvania buck season; you'll get a lot of attention and none of it will be good. While the agencies offering this consolidation help paint a rosy picture, if the picture is turned over, the view is very uninspiring.

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