Debt Consolidation Articles

Debt Reduction And Credit Card Consolidation

Using credit cards to consolidate your debts isn't as effective as debt reduction. Credit cards oftentimes have high rates of interest, and will oftentimes lead you into deeper debts. In fact, credit cards are one of the leading causes that debtors seek out debt consolidation solutions.

Debt reduction means that you're working to decrease your bills, not add or keep the bills in existence by using another source to pay off the debt. Therefore, instead of considering credit cards as a source for debt consolidation, you must find a way to lower your debts.

Let's say you owe money for your mortgage, car payments, insurance, utilities, and other bills that add up to $1200 per month. Now, is there a way we can lower this amount? Absolutely, but can we find a mortgage that will refinance our loan and help us to merge our monthly bills into one payment?

Yes. There are loans available that offer cash back, underpayment, and overpayment plans; as well as loans that will wrap your bills into one, merging the bills and adding them to your monthly installment.

Do not misinterpret this: your utilities are your responsibility, but for the most part, your car payment, mortgage, and any credit cards or other loans will be rolled into one monthly payment. Therefore, if you're paying out of the $1200 up to $800 per month toward car payments and mortgage, you may find a lender who will lower this amount to $600 more or less per month.

Furthermore, if you land a loan that offers cash back, you can use this money to payoff your debts.

Finally, utilities can be reserved and grocery bills can be lowerd. In addition, insurance coverage can also be lowerd. Therefore, debt reduction is wiser than credit card debt consolidation in the long run.

Article obtained from: web publishing content

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