Debt Consolidation And Home Equity Loans As Credit Card Debt Reduction Solution?
Is going to your local bank and getting a home equity line of credit or some other type of debt consolidation loan a good idea? You will get many differing opinions from many experts in the field. Many say that it is not a good idea because the men and women in debt fail to change their extravagant spending habits and will have new debt on top of the old original debt.
I believe that although this can happen to many people, that some people will actually benefit from this strategy as a debt reduction solution. I have a couple of reasons for this.. the first being psychological.
There is a great feeling when you wipe the slate clean and start new behaviors from this new slate. For example, having 10 different credit card statements coming in every month does not feel good at all. It can create emotions within us that may create despair and powerlessness. This is hardly going to motivate us to change our behaviors.
Having one loan to pay monthly while beginning a new savings plan for emergencies feels fresher, newer, and more inviting for healthier spending behaviors and patterns to take place.
The second reason that I believe in consolidation loans for men and women in debt is for interest rate relief. Paying 5 percent interest on your loan, vs. 20 percent interest on your credit cards is big. The savings is enormous and is even larger if you have a lot of debt to consolidate.
Changing spending behaviors is an absolute MUST is you are going to consolidate credit card debt with the above debt reduction solutions.
Cutting up credit cards or putting them in a safe deposit for emergencies must happen before embarking in this type of debt reduction strategy.
Lastly, I would like to say that you must shop around for reputable banks and reputable debt reduction companies. Consumer Credit Counseling (www.nfcc.org) is a non-profit company that can help send you in the right direction.
Michelle Tukachinsky
Article Author :Michelle_Tukachinsky
Last 5 posts in Debt Consolidation
- Eliminate Credit Debt - CRA - Credit Reporting Agencies - August 31st, 2008
- Fix Your Finances With Debt Relief - August 31st, 2008
- Few Tips For Credit Card Debt Relief - August 31st, 2008
- Info on Credit Card Consolidation - August 29th, 2008
- Credit Card Consolidation - Pay Off Debt - August 29th, 2008
If you don’t pay on time then you have to Eliminate Credit Debt. When the month is longer than your income - one fact is obvious - it cannot continue for very long - you have to stop the rot.
CRAs, the credit reporting agencies are a central information base for all credit card companies and they receive millions of reports every day. If you are a few days late, it might remain a secret, but if you go over 30 days, they’ve got you. This info will definitely reach your credit report and your score starts to fall. It can… Continue reading
Credit card debt is like a creeping disease - but we can Eliminate Credit Debt and eliminate the disease if we know the rules of the game.
The credit card companies do not want you to know all the rules - they rule when we are ignorant of the rules! Did you get that?
Stores offer cards, gas stations, my old granny and her dog offer cards, and they stuff our mailboxes - how do the US Post Office handle it all? It’s too easy to have too many cards. When you charge your purchases, it doesn’t seem like you are spending… Continue reading
If you are looking for debt relief, then you are not alone. The average household is finding themselves overwhelmed with debt lately. With the cost of living increasing, rising costs and bills to pay, this creates difficult situations when it comes to credit.
Those who find themselves far in debt are having trouble dealing with their finances and finding a way out.
It is enough to try and figure out how you are going to make your minimum monthly payments, but when you factor in other bills and necessities it is enough to make you crazy. If you can figure out your… Continue reading
