Credit Card Debt Consolidation Today: How It Works For You

Nov. 12, 2012 - PRLog -- Credit card debt consolidation is a highly popular debt reduction method. Unlike other debt relief methodologies, this does not require the debtor having to miss their repayments, which means that the debtor is unlikely to have their credit score downgraded. However, while debt consolidation has great positive points, it does have some noticeable downsides which require due consideration prior to embarking upon such a plan.

Get Started With Debt Consolidation:

http://www.nationaldebtreliefprogram.org/

The Advantages of Credit Card Debt Consolidation

Consolidation plans require the debtor joining a Debt Management Plan or DMP as it is more commonly known. The debt management company negotiates with their clients creditors with the aim been to reduce interest rates and fees.

So, for example if a credit card debtor has say 4 cards with an average debt interest rate of 19%, by the end of the negotiation process this rate may well be brought down to a more reasonable figure such as maybe 11% or 12%. This interest rate downgrading brings about reduced monthly payments and a shorter payback time frame.

Furthermore, with debt consolidation, it has the added advantage of having no any risks attached such as credit rating downgrading or court cases.

Also, debt consolidation fairs well against the option of taking out a consolidation loan. These loans apparently reduce the monthly payback amounts, just like a DMP. However, they have one noticeable difference, in that they are loans. So if you default on your consolidation loan it results in a bad credit rating; whereas if you decide to leave the DMP, there is no negative downside, because you simply pay a monthly maintenance fee for as long as you are participating in the program.

Get Started With Debt Consolidation:

http://www.nationaldebtreliefprogram.org/consolidating_cr...

Consolidation allows the debtor to reduce their payments without endangering their credit rating. However, it does require that the debtor make monthly payments, even if they are at a reduced rate. If this is the case with you then fine, however, if even reduced rates are beyond your ability to pay, then you would be better off considering either debt settlement or bankruptcy.

This is an important point, because if a debtor joins a relief program without taking into consideration their ability to make the repayments, they might end up defaulting, which brings them right back to square one again.

Is a Consolidation Program the Best Debt Relief Option for You?

Consolidation is a great debt relief option, which has many advantages over and above either credit card debt settlement or bankruptcy; however it does come with some downsides. For debt consolidation to work effectively, the debtor has to make sure that the debt reduction plan is a viable option for them in the first place, and they must ensure that they pick the right DMP provider; and finally they must overview the credit card debt consolidation process, on a monthly basis, in order to make sure it is run efficiently.

National Debt Relief Program offers a free debt analysis which can be taken advantage of at their website:

http://nationaldebtreliefprogram.org/