Consolidating high interest rate credit cards
Credit Counseling offers one of the most common and legitimate ways to get your credit card bills reduced and under control with a single consolidated monthly payment.
There are benefits and drawbacks to working with a credit counseling service.
So far this year they have shortened by four months.
Those with short to medium-term debts can use such offers to finally get out of the red, while those with much more to repay can look to these cards to provide a lower cost alternative to their existing debts.
You will typically continue to get your normal monthly credit card statements in the mail.
This allows you to verify the payments are being made on time and to see that the bank is applying your payments according to the plan you set up with the credit counseling company.
If you do not make an on-time payment, you risk losing the reduced monthly payment benefit.
You do have the option of paying more towards your debts on the plan, which would help you finish early.
The method used to get your payments lower than what you may be paying today is simple enough to explain; your banks agree to lower your interest rates, and consolidate all of your payments into a single payment.
A repayment plan using credit counseling to consolidate your debt will typically last 4 to 5 years. Your fixed payment is due on the same day each month for the duration of the plan.
You cannot miss a payment while paying your debts through this form of consolidation.
The counseling agency will have some set criteria they use that will identify which of your accounts can be accepted into the debt management (DMP) plans they offer.
The credit counselor uses their automated system to contact the credit card companies you owe, putting forward a repayment plan.
You can also withdraw from the plan at any time and take over payments to your creditors, but you may lose the lower interest rates.