Credit Consolidation: When Does Credit Consolidation Genuinely Make Sense?
Credit-yogi.com understands that getting out of debt is a challenge that many people face these days. In particular, credit card debt has reached frightening proportions. When money is not available to meet day to day living expenses, the only choice is often to start using credit cards. This works until the credit cards have built up such a high balance that making the monthly payments on them becomes the final budget breaker.
Credit consolidation, consumer credit counseling and credit management firms can certainly be helpful in this effort. However, when is the right time to go to these sources? Is it possible and far less cumbersome to avoid their services? To determine whether or not credit consolidation genuinely makes sense, you may want to make an honest effort to develop a personal plan for getting out of debt. The steps are straightforward, but they may not be as simple as they sound. Great will power on your could be required.
Here are the steps you can take:
- Know what you are spending. You can start to keep a meticulous log of all of your expenditures. Most people are quite familiar with the large debts, but may not realize how much money they are spending on small things like newspapers and lunches. These expenditures can add up surprisingly fast.
- Once you know what you are spending, you can decide what is unnecessary and can be eliminated. You don't have to live like a pauper, but you also may decide that you don't need the double latte espresso from the coffee shop when there is a regular old coffee pot at work.
- top using your credit cards. This sounds a lot easier than it is. It may take great will power for you to break a habit that possibly got you in trouble in the first place.
- You can shift your credit card balances around. You can pay off high interest rate cards with low interest rate cards. This can a bad thing, you may want to consider this option carefully and be wary of low, low introductory rates. It's good to figure out if you can have those paid off before the introductory rate jumps up.
Having done all that, you could still be having trouble getting out of debt. If so, you may want credit-yogi to help you with credit consolidation advice. Credit counseling agencies are readily available, but you may want to be careful in choosing one. Some are non-profit, which could reduce the fees that you will pay to them. Some for profit agencies have reportedly pretended to be non-profit.
You may want to know if the firm is a member of a professional agency such as the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. These are non-profit organizations of debt relief advisers. Their members typically have excellent relationships with the various creditors and can offer some special consolidation deals. Through their influence with the creditors, the creditors could be convinced to lower interest rates or even the balance owed. After all, if in danger of default, the creditors want to get at least something back, and if you are driven into bankruptcy they may get nothing, so they are typically willing to make a deal.
It's good to know if the debt consolidation firm will offer a free initial consultation. They should and by law many firms must include credit counseling as part of that consultation. Here is where your personal tracking of expenditures will be helpful. If you haven't yet made such an analysis of your true spending habits, the credit counseling firm will probably insist that you do so. It also never hurts to check with the Better Business Bureau, to see if there are complaints registered against the firm you are considering.
Once you have chosen a firm to work with, credit-yogi.com can connect you with one or more free consultations, you can insist that all agreements be in writing, and that they include fee relief if the firm does not provide the services promised. You could then be well on your way to getting out of debt.