Guide to Credit Card Debt Consolidation Dos and Don’ts


You don’t have to be afraid about facing a mountain of debt as you still have the option of joining a debt consolidation company to get out of debt. The following are some dos and don’ts of debt consolidation.

Consolidation Dos of Credit Card Consolidation

Do understand all the costs that are involved in consolidating the loans. You will be charged points apart from the interest fees. However, the advantage of credit card debt consolidation is that it offers a maximum tax advantage.

To cultivate a good spending habit. It would help if you started to learn how to live a disciplined life and create a budget for your family. Every month, you must make sure that your expenditure doesn’t take up the amount you need to set aside for paying the loans.

Do see a credit counselor find out whether the debt management plan is suitable for you. The credit counselor will review your financial information and carry out a negotiation with the creditors. This is done to help you get a lower interest rate and waive certain fees. Debt management plans aim to get you out of debt in 3 – 5 years. If you don’t like the plan, you can resort to other debt consolidation and debt settlement alternatives.

Don’ts of Credit Card Consolidation

Don’t get a secured credit card debt consolidation loan because secured loans require collateral. The collateral is usually in the form of your property, such as a house and car. If you fail to pay the loan, they will repossess your home.


Don’t delay and not do anything to solve your debt when you know you cannot make the repayment. Instead, you should contact the creditor to discuss your financial situation, but they usually won’t be willing to reduce your interest rate or loan amount. This is where the debt consolidation company becomes helpful. The debt consolidation company will consolidate all your loans and reduce the interest to a lower rate than you can afford. You should contact a debt consolidation company if you are already 6 months behind in payment.

Don’t be confused that debt consolidation is the same thing as debt management and debt settlement. Debt consolidation is consolidating your debt into a single payment. Debt management is getting a counselor to create a suitable payment plan, but you still pay back 100% of your debt. Debt settlement is settling for a lower amount than what you originally owe, but you must be able to come up with a large amount of money upfront.