Consolidate credit cards In the volatile economy of today and rampant unemployment, many people are lucky to get away with their credit scores intact. There has been a rise in debt consolidation and debt settlement programs ever since the volatility of the world economy began back in 2008. The secret is to find which type of debt program is best for your current situation.
The first consideration in determining which debt management program is best for you is to first take stock of your assets. If you own a large asset such as a house, you have many more options than someone who does not. A secured type of debt management program can allow you to settle your debts without any negative reflection on your credit score, and much less money put towards interest payments.
Debt consolidation is one way to consolidate credit cards if you own your home. This is the most advantageous way to do this, as you simplify the process of payback by rolling all of your debt into one loan payment. Debt consolidation companies are also much more lenient and flexible when they know that you own your home. The timeframe in this scenario is also significantly reduced, and you can be completely out of debt within 4 to 12 months.
With debt consolidation, you can also reduce the principal of the balance by as much as 50%. Although this is not a common occurrence, if you have the right debt consolidation company on your side, it can definitely happen. Make sure that part of the vetting process in choosing your debt consolidation company is them describing to you how they will reduce the balance on your principal.
However, if you do not own your home or you cannot get all of your credit cards consolidated into one loan, then your best course of action may be a debt settlement program. Although these programs take a little longer and may have a higher interest rate than a debt consolidation program, it is definitely preferable to a bankruptcy, which triggers legal action and forces a non settlement of the debt. A non-settlement of the debt is the last thing that you want on your financial record, as is the most debilitating towards your credit score. A low credit score can mean thousands more in interest on large assets as well as being cut off from business loans and emergency loans from traditional financial institutions.