Why To Consolidate Credit Card Debts

It is fair to say that individual credit card debts have been slowly increasing over the last few years. The convenience of credit cards in making online and over the counter payments adds to the issue. Plus a lot of lenders are happy to send you credit cards even when you haven’t applied for them. And the problem is, we are happy to use them!

So you end up with a wallet full of credit cards from different lenders and maybe you have a few store cards thrown in for good measure. And without you knowing it your debts are silently growing and you eventually take stock and decide to do something about it.

Well there are a number of options to take such as debt counseling where you can sit down with a debt management advisor but that will depend on how much your debts are and whether you can afford to pay the debts off or not. They may even suggest that you consolidate credit card debts from the start but do you really want to pay for advice where you know that that’s all you needed to consider in the first place.

For now lets assume you have a good income and once you work out all your expenses you still have a reasonable disposable income then you need to consider what you need to do first. But what?

Well, the first thing you should do is cut up all your cards. But then you still need a plan of action. And that plan, and your highest priority, is to consolidate credit card debts.

So you may still be thinking whether debt consolidation is the best thing to do so lets go through a number of reasons why you need to seriously consider the ‘why to consolidate credit card debts’ option.

Lower Interest Rates
Most credit and store cards have much higher interest rates than personal or secured loans. This could be anything from 5-10% more and if you are not paying off the credit each month and you have increasing debt then even an extra 5% ‘every’ month over the course of a year means your paying interest that you could be putting towards a debt consolidation loan. It’s basically wasted money.

Reduce Your Monthly Payments
With a significant reduction on interest payments you end up with just one low monthly payment, rather than several payments to many different lenders. The extra saving you make as you consolidate debts should then be put towards another financial product, which will gain a return longer term.

Debt Management
By having just one loan it makes your monthly finance management a whole lot easier. Rather by worrying about whether all your creditors are being paid each month, and on time, you now only have one manageable loan to pay. Plus if you setup a direct debit or standing order it will make your life even easier. This reason alone should be enough to convince you to consolidate credit card debts as it makes for a stress free end of month.

Cheaper than Debt Counseling
If you wanted to take the easier way and try debt counseling you may end up paying a sizeable amount in consultancy fees just to be told to consolidate all your debts. By doing the homework yourself on the best way to consolidate credit card debts you will save more money.
By considering the reasons above on why to consolidate credit card debts you will clearly see it makes sense to consolidate all your debts into easy, manageable and low monthly amount.

And some final advice, which you need to consider very carefully with, consolidation loans. Don’t just take out a loan to consolidate credit card debts and think that’s your job done. Remember one piece of advice at the start of this article and that is to cut up your credit cards or at least get rid of all of them but one. If you continue to spend on your credit cards while you have your consolidation loan then what’s the point? Take this opportunity to consolidate credit card debts with a consolidation loan and you benefit from it for years to come. Don’t and you can look forward to a never-ending cycle of credit card debt forever.

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Paul Hockney is an online financial advisor with a credit card consolidation company called The Credit Card Debt Management Service. Offering advice on debt consolidation and how to find loans with bad credit plus debt help tips for every level of debt.