Consolidating and eliminating credit card debt
One of the downsides of working with a traditional debt consolidator is that your credit card accounts are open and available for use.
You may be tempted to continue using your cards and could wind up doubling your debt.
Ramsey says paying off one debt builds momentum to pay off the next. The theory has proven effective, though it requires discipline and sacrifice, two things that consumers were probably missing in the first place.
To summarize: Traditional debt consolidation companies review your debts, income and credit score.
Consolidated credit companies, like credit counseling agencies, usually point consumers at debt-relief options like a debt management program, debt settlement, a debt consolidation loan and, in extreme situations, bankruptcy.
Then list all your debts (except your mortgage) and start paying them off smallest to largest regardless of interest rates.We’ll also help you develop a budget that minimizes your monthly expenses.Finally, based on your income, assets and budgets, we’ll recommend a debt relief solution tailored to your personal situation.The In Charge Debt Consolidation Alternative, or debt management plan, is a program that gives you all of the benefits of debt consolidation without having to take out a new loan.With the debt management program, all of your payments are consolidated into one monthly payment that you pay to In Charge. In Charge helps you secure lower interest rates on many of the credit cards you do have (with exceptions), meaning that more of your monthly payment will go to pay off the balance, and less to interest. The In Charge debt management plan is designed to help you get out of debt in 3-5 years, paying less than you would if you continued on your own, or even with traditional debt consolidation with higher interest rates. When you work with a bank or other for-profit debt consolidation firm, you will pay fees in the form of interest and loan origination charges to secure and maintain a debt consolidation loan.
If you are juggling multiple credit card bills, you may benefit from the convenience of having one consolidated monthly payment.