Can I Consolidate My Debts?

This is an excellent question. Considering the stresses associated with juggling credit card debts and other bills, you are wise to consider consolidating credit card debts. And believe it or not, your credit card companies will look favorably on such a decision. Certainly it isn't one to be taken lightly, but it is an excellent alternative to bankruptcy. While it gets your debt under control, it also brings benefits that are out of the question with bankruptcy. Have you ever heard of someone's credit rating rising because they filled bankruptcy? Of course not! But with debt consolidation, it isn't uncommon. The reason is that bankruptcy leaves your creditors holding the bag, while debt consolidation relieves the pressure and lets you responsibly repay your debts more quickly!

Six Steps to Credit Card Debt Consolidation

Should you decide to pursue credit card debt consolidation, there are a Six Steps toward debt consolidation:

• Step One: Review finances - Sit down with all of your credit card account balances in front of you. Write down the balances and the interest rates on a single sheet of paper along one side of the page. While debt consolidation won't include loan balances like for a car, a payday loan, or a home mortgage, jot those down as well. What are the minimums due on each? What is your monthly income? Are any past due? Put an exclamation point beside those balances. Are you getting phone calls on any of the accounts? Put an "X" beside those balances. Total up what you should be paying each month. Total up all your sources of income. Compare the two. Can you honestly pay those balances while paying all the rest of your monthly obligations like groceries, gasoline, utilities, and so on? If not, it is likely time to call or contact a credit card debt consolidator.
• Step Two: Investigate debt consolidators - There Internet is a great way to search for credit card debt consolidators. Just enter the phrase - "credit card debt consolidation" - and many sites will come up. Visit a few and get a feel for what they offer. Bookmark the ones that impress you, and then do a little more investigation on your own. Type their company name, or site address into a search engine with the word "complaint." Pay special attention to any complaints about them missing their appointed payments to clients' creditors. If they miss a payment, it impacts your credit, not theirs. Inquire with the Better Business Bureau as well to see if there are any complaints against them. If there are complaints, delete their bookmark, and keep searching. This is a very important step, and choosing the right debt consolidator is just as important.
• Step Three: Touch base with consolidators - Legitimate credit card debt consolidators will have no problem with answering your questions to put you at ease. If they pressure you to sign with them, then you might think twice about proceeding with them. Be sure to ask also about any hidden charges or fees that will be included in your monthly payment to them. Know too that they will have questions for you. That is all part of the process as they analyze your situation. It isn't uncommon for them to ask for details on account balances, etc., as well as employment information.
• Step Four: Ask for proposals from each - Once you've decided on a few credit card debt consolidators with whom you feel comfortable, ask them for a proposal on your case. Each will provide you with a proposal which will detail the size of the loan, the interest rate on the loan, the term length of the loan, your payment each month, and any special considerations. For example, what will happen if you are late on a payment?
• Step Five: Consider their proposals - Much like what you did in Step One, examine each proposal side-by-side. Which runs the length you are most comfortable with? Which has the lowest interest rate? Which is most lenient should you ever be late on a payment? Which, if any, has a grace period for late payments? Look at all the details and assess which is right for you.
• Step Six: Choose the one that's right for you - Once you are happy with a company's proposal, proceed! If they haven't already provided the documents with their proposal, request them. Then, sign all the documentation required. In the interim, while you await the loan to come into effect, you must continue paying minimums due. This period can be as long as a few weeks. But after that period, you will start making the agreed upon single payment to the debt consolidation company.

Once you eliminate credit card debt, you need only focus on making that one payment to the consolidation company. That and staying out of debt!