Credit card debt consolidation
Credit card debt consolidation is a strategy in which multiple credit card balances are combined into one balance at the end of a billing cycle. Credit card debt consolidation comes in many forms, including combining different credit cards, offering cash advances, and consolidating credit card debt by applying it to a home equity line of credit. According to companies like SoFi, consolidation may provide greater credit consolidation rates and more options for consumers to repay their debt faster.
It is a process in which the credit cards of multiple borrowers are consolidated in the interest of the consumer, in exchange for a lump sum from a creditor (the creditor is typically the lender). In these scenarios, the consumer’s current debt will be removed from their current balance. While credit card debt consolidation is commonly offered through the credit card issuer, these consolidation programs can be utilized by a variety of private debt consolidation companies, financial advisory agencies, attorney and credit card companies. Many of the financial services companies will offer credit card consolidation programs to assist consumers in maintaining a debt repayment strategy. The CFPB does not regulate debt consolidation plans.
Where to Go for Debt Consolidation
When considering an application for consolidation, consider seeking information on the company from the consumer’s credit card issuer. The credit card issuer may be able to provide more accurate, and more cost-effective, information about the company. Many companies will be more informative about the options available to the consumer and how the consumer can learn more information about the company’s history. After you have been chosen by the company, you will receive a written offer for credit, and you can shop around for the most competitive offer.
Debt consolidation is a smart financial move for consumers who wish to reduce debt and are in need of an affordable way to do so. Many consumers have their debt paid off over the course of years, and taking advantage of these opportunities can actually help you to better manage your debt in the long run. If you have no access to a bank or other type of debt consolidation company, contact a private debt consolidation company that is easy to work with and has a reputable track record.
Prepare for Debt Collection
Collection agencies are paid by creditors to collect on unpaid debt. Debt collectors may find it helpful to choose a collection agency that works for the same creditors that the consumer owes. When dealing with private debt collectors, you should always file a complaint about the collection activities with the Federal Trade Commission (FTC). You can find a listing of the FTC’s contact information on their website.