Should You Join a Credit Card Debt Consolidation Program?

It’s getting harder and harder to pay off bills. Unemployment is higher than it has been for years, decades even. If you’re like me, the issue of piling credit card bills is a major one on your mind. But, luckily, there’s an option out there that might be able to help you with your growing credit card debt. Growing credit card debt will lower your credit score, making it difficult, or even impossible, to get a mortgage or apply for a small business loan in the future. One possible option might be a credit card debt consolidation program.

What is a credit card debt consolidation program? A credit card debt consolidation program works in a very simple way. A third-party lender, the debt consolidation company, will float a loan to you for the total sum due on a number of outstanding accounts you might have. This debt consolidation loan may or not have a better interest rate and it may or not have better general terms to it. But a credit card debt consolidation program might just be the extra help you need.

If you have a lot of home equity, you really should consider a credit card debt consolidation program. Home equity exists when your home has gone up substantially in value in the last few years, and you have paid off a large portion of your mortgage. This amount you’ve paid off is your equity. Equity can get you a “secured” credit card debt consolidation loan, meaning the equity serves as collateral. This collateral can help you receive better rates on your credit card debt consolidation loan. You can still get a debt consolidation loan without equity of some sort, but it is less likely that you will, and for less attractive rates.

There are obviously several pluses to being in a credit card debt consolidation program. It can help you manage all the debt you have. If you have several credit cards across a number of accounts, a consolidation loan will help you manage it. I know that having more than a handful of credit cards means more than a handful of bills to pay. And more than once, that meant missing one of these payments over the course of a month.

Enrolling in a credit card debt consolidation program is not for everyone. If you are interested, consider consulting your mortgage broker first. They can probably give good case-by-case advice.