Credit Card Consolidation Options
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What is Credit Card Consolidation?
Credit Card Consolidation is a debt relief option often used by people with too much credit card debt. People looking for credit card consolidation help typically are making just the minimum payments on their credit card debts and don’t see the balances of their credit card debts going down.
Credit card minimum payment trap - Credit Card debts typically require a small minimum monthly payment. While it may seem convenient to make a low monthly payment to your credit card debts, it is actually a trap. The purpose of the minimum payment on credit card debt is to prolong the amount of time it takes to pay off the credit card debt; therefore, making just the minimum payments on credit card debts is a trap to keep people in debt as long as possible. People that are making just the minimum payments on their credit card debts don’t realize that in some cases it could take up to 20 years to pay off their credit card debts (if they pay just the minimum payments).
Credit Card balances not going down - Credit card companies make money by charging people interest on the balances that are owed on their credit card debts. It is important to remember that credit card companies are in business to maximize profits. It is not the responsibility of the credit card company to help people pay off their credit card debts. The longer it takes people to pay off their credit card debts, the more interest the credit card companies can charge; therefore, maximizing the amount of profit that is made from the credit card debt. In fact, in 2009 congress passed a bill often referred to as the Credit Cardholder’s Bill of Rights which highlights the amount of time it could take to payoff credit card debts. Credit card companies are required by the Credit Cardholder’s Bill of Rights to provide details about how long it could take to pay off credit card balances. The example below illustrates how much time it could take to payoff credit card debts if people made just the minimum monthly payments:
|Credit Card Balances||$25,000|
|Minimum Payment||2% of the Balances Owed|
|Time to pay off Balances||600 Months|
|Total Interest Paid||$58,617.95|
Source: Creditcards.com (Minimum Payment Calculator)
Who needs Credit Card Consolidation?
A goal without a plan is just a wish. Being in credit card debt and not having a plan to pay it off is wishful thinking. When should people look for Credit Card Consolidation?
If you can answer yes to any of the below questions, then it’s time to look for Credit Card Consolidation:
- Are you making just the minimum payments on your credit card debts?
- Are the balances on your credit card debts not going down?
- Are you transferring balances from one credit card to another?
If any of the pitfalls mentioned above relating to credit card debt applies to you, then it’s time to come up with a plan and look into credit card consolidation.
What Strategies are used for Credit Card Consolidation?
Credit card consolidation can be done by: Balance transfer from One credit card to another, getting a debt consolidation loan or enrolling in a debt consolidation program.
Credit Card Balance Transfer - Transferring balances between credit cards can be tricky but in limited circumstances it could be a successful strategy to get out of credit card debt. If you are able to do a balance transfer to a new credit card that has enough of available credit to accommodate for the transferred balance, for which the balance transfer rate is lower and the period to pay off the transferred balance is long enough to allow you to pay off the transferred balance, then doing a balance transfer could be a good strategy. The most common mistake people make when using this strategy is that they do not give themselves enough time to pay off the transferred balance.
Debt Consolidation Loan - If you have a good credit score and your debt to income ratio supports the amount of debt that you owe, the best way to get out of credit card debt is to look into a debt consolidation loan. When considering this option, important factors to consider are getting a lower interest rate than the debt that is being consolidated and making sure the monthly payments on the consolidation loan is affordable.
Debt Consolidation Program - Debt consolidation programs focuses on reducing the amount of credit card debt that is owed by negotiating down the balances thru settlements with the credit card companies. This option is best for people that do not meet the credit and income requirements of doing Credit Card Balance transfers or Debt Consolidation Loans.
Who can qualify for Credit Card Consolidation?
There are different qualifications for a Credit Card Consolidation options. Below is a summary of requirements to qualify:
|Credit||Income / Payment History|
|Balance Transfer||Good to Excellent||
|Consolidation Loan||Good to Excellent||
|Consolidation Program||Credit not required||Program payments are custom tailored based on affordability index|
See What Our Customers Say
"I am retired and I will be turning 72 this year. Oh boy I have been so stressed with all these credit card payments. Not only do I make my payments on time, but I never seem to see the balances go down…CountryWide Debt Relief… programs would not only keep my monthly payments affordable but he gave me a light at the end of the tunnel. Finally I am so relieved that my payments will eventually get me out of this debt without doing bankruptcy.."
Consuelo W.Oceanside, CA
Case Study #19064 - Client from Oceanside CA saved $41,361 by enrolling in CountryWide's Debt Relief Program.
Client #19064 from Oceanside, CA hired CWDR because they were having a difficult time making the minimum payments to their debts due to loss of financial provider.
The Credit Card Consolidation Program thru CWDR was able to help client # 19064 save $41,361*. Client had $15,844 in debt and making just the minimum payments each month it would have taken 523 months to payoff the debt and the client would have paid back $52,363. The Credit Card Consolidation Program helped this client get out of debt in 39 months.
Frequently Asked Questions
Credit card debt can be consolidated with a consolidation loan or consolidation program. Consolidation loans require good credit to qualify; however, credit card consolidation programs do not require good credit to qualify.
Getting Approved for Credit Card Consolidation is GUARANTEED* and is fast and easy. Usually takes less than 10 minutes to see which Credit Consolidation Option is best for you.
Credit Card Consolidation loans require you to provide income documentation to prove that you can afford your financial obligations. Credit Card Consolidation Programs do not require income documentation to qualify.
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