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Is combining credit card debt a good idea?

On Behalf of | Feb 22, 2017 | Credit Card Debt

Many people in Louisiana who are struggling to make multiple credit payments think that consolidating their credit card debt is the answer. After all, it appears to be a good alternative to keeping up with different payment due dates and amounts each month. As attractive as consolidating all your credit card bills into one payment may seem, there are some things you should know. Depending on your specific financial situation, it may or may not be the best option for you to get control of your credit card bills.

Access to lower interest rates

Credit card debt consolidation may enable you to lower your interest rates and the total amount you have to pay back. Lower interest rates are not guaranteed and are often only available for a certain length of time. Better interest rates are unusually offered to people who have good credit histories. Double-check any credit consolidation offers you receive to ensure the interest rates are lower than the ones on your credit cards. You should also check your cards for balance transfer fees. If you cannot comfortably afford to make payments that include consolidation costs and potential balance transfer fees within the time required for repayment, you may want to consider another option like a bankruptcy repayment plan.

There are factors you should consider before applying for a loan to pay off your credit card debt. Take into consideration your financial habits. It is possible for you to use your home to secure the money you need to pay off your credit card debts. If you decide to take out a home equity loan or refinance your house, the consolidation payment becomes combined with your mortgage payment. If you fall behind in repayment, your lender may foreclose on your property and require full payment of the entire mortgage and consolidation loan combined for you to keep your home.

Financial behavior

If you maxed out your cards because you have poor money management habits, you will need to alter your financial habits so you do not max them out again. If you struggle to pay your credit cards because you do not bring home enough income from your job or you have not established a reasonable household budget, then you risk falling back into the same financial trap again in the future.

All loan consolidations are not equal. Credit card debt consolidation may provide you with more wiggle room financially. But you still need to address the underlying issues that have led you to consider this solution. If you feel overwhelmed by your credit debt, have fallen behind on payments and are considering consolidation, you should discuss your situation with an attorney first to learn more about your options.

Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.”