A guest post on debt consolidation...

Another PF writer, Nancy Smith, reached out to me online and asked that I let her be a guest on my blog and I agreed. Below is the article she asked that I share regarding credit card debt consolidation.

What you should know before getting help of a credit card debt consolidation program

You can think of getting help of credit card debt consolidation when you face difficulty in managing your multiple credit card bills. However, before doing so, make yourself aware of certain facts regarding a consolidation program.

Debt consolidation program – How it functions

When you enroll in a credit card debt consolidation program, a consolidator, on behalf of the consolidation company, assesses your financial situation. He then starts negotiating with your creditors to reduce the interest rates on your unpaid credit card bills. The consolidator also decides upon an affordable monthly payment and gets it approved by your creditors. When you make this payment to the company, the consolidator distributes it amongst your creditors on your behalf. Thus, you pay off your credit card bills within a stipulated time period just by making single monthly payments.

Consolidation program – What you should know

Before getting help of a consolidation company, it is better if you make yourself aware about certain facts in regard to credit card debt consolidation program. Here are some facts which you should be aware of.

· Must go for credit counseling first – Before getting help from a consolidation company, you should go for a credit counseling session. It will help you decide whether or not you should enroll in a consolidation program to repay your credit card bills.

· Need to stop swiping credit cards – You’ll never be able to get out of debt if you continue using credit cards when you’re enrolled in a consolidation program. So, do not use your credit cards before you get out of debt completely.

· Company can negotiate better – The consolidation companies usually have good terms and conditions with the creditors. So, they can negotiate better with your creditors so that they agree to the terms and conditions of repayment.

· Need to monitor credit accounts – Even if you pay off your credit card bills with the help of a credit card debt consolidation program, you should monitor the statements sent by your creditors. Doing so will make your aware whether or not the consolidation company is making the necessary payments on time.

Apart from getting professional help for the purpose of credit card debt consolidation, you can also consolidate and pay off your debts on you own. You can take out a consolidation loan and replace all your existing credit card bills with the new loan. With your creditors’ approval, you can also transfer your high interest debts to a card with relatively low interest rate. Referred to as balance transfer method, this consolidation method can help you become debt free all by yourself.