According to an ABC News report, the average credit card debt for U.S. households is $8,400. If you are like others in Oregon who are struggling with financial challenges, you may have considered consolidating your debts. At The Law Office of Kim Covington, we know it can be difficult to know whether this might be the right debt relief option for you. To help you make that decision, we will discuss the pros and cons of credit card debt consolidation in this post.
Depending on your situation, you may combine your credit card debts by obtaining a loan or working with a debt consolidation company. Through either of these methods, you would make one payment toward your debt each month rather than paying each of your creditors individually. This may be easier for you to manage, which will help you to get control of your finances so you can achieve a fresh financial start.
When deciding whether to combine your credit card debts, it is important to keep in mind that combining them does not eliminate them. Therefore, you must still be able to make your required monthly payment. If you do not have regular income or cannot afford a monthly payment, you may consider other options to help you regain control of your finances.
Another benefit to getting a loan or employing a debt consolidation plan is that it often results in a reduced interest rate. This may lower your monthly payment to an amount that is more manageable given your circumstances, or allow you to put more money toward your principal.
Consolidating your credit card debts may seem an attractive option because it may reduce the amount you must pay each month. When you are making your decision, however, you should carefully review the terms. In order to reduce the amount of your monthly payments, they may be extended over a longer repayment term. If you cannot keep up with the extended obligation, another option such as bankruptcy may be better suited for your needs.
For more information about unsecured debt, please visit our Credit Card Debts page.