Debt Consolidation is not the answer you may be looking for when it comes to help with your credit card debt

There are a couple of approaches to consolidating debt. Credit card companies suggest transferring debt from multiple cards to one card at a lower interest rate. This is in effect transferring unsecured debt to another unsecured debt instrument with no tax benefits. Not only are you still carrying the same amount of debt but, if you miss a payment, your interest rate will go up. Believe it or not, most consumers will end up using the other credit cards that now have a zero balance and the cycle continues all over again. Truth be told, this is what the creditors want you to do so they can make more money. They expect that people will not change their spending habits and they will continue to reap the billions of dollars in interest for years to come.

Homeowners with equity may find it more advantageous to take out a home equity loan, if you qualify. In the process, unsecured debt becomes secured and therefore you may get some tax advantage. You may maintain your good credit while lowering your payments; however, you are now taking an unsecured debt and putting your home on the line. If you miss your payments or heaven forbid something happens to you and you can't make your payments, you may loose your house. In addition, most people won't get rid of the credit cards that they just paid off and again, they will find themselves charging on the cards and owing all over again. Never trade unsecured debt for secured debt unless you know that you will not use those credit cards again.

If you find yourself scrambling to make ends meet or just want to learn more about your financial options,
give us a call 1-877-510-1001.