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What is Debt Consolidation?

Debt consolidation is a simple, safe, and effective way for people with excess credit card debt to responsibly pay off their debts without filing for bankruptcy and without having to get a loan. Consolidating your unsecured debts, such as credit card debt, could help you get out of debt in a fraction of the time it would take you on your own, especially if you can only afford to make the minimum monthly payments.

Why do I/We Need Debt Consolidation?

Remember when you got your first credit card, promising yourself that you'd pay it off IN FULL every month? You probably did that for the first month or two, or maybe even for the first year. Then something came up. Your washer or dryer broke, or your car's transmission died, or your child needed medical care – or it could have been any combination of a thousand legitimate emergencies, but it meant you started to carry a balance on the account.

It happens to millions of us every year. Before we know it, our credit card balances are just too high to even consider paying off in full at the end of the month, and we come to the sad realization that we are, in fact, buried in credit card debt - the very thing we promised ourselves would never happen.

The average American family carries just over $15,500 in credit card debt, and most carry their balances from month to month. If you're in this situation and you don't see it changing anytime soon, it's time to seriously consider taking action to get the debt relief you need to regain control of your finances. There are a number of options available, and it really does depend on your own circumstances as to which debt relief option is best for you. One thing's for sure, it won't get better on its own. You have to do something or your situation will progressively get worse. Here are just a few of the options available to you:

Option 1: Do nothing. This is certainly the easiest option. Just keep making the minimum payments and in about 20-30 years you'll have your credit cards paid off. Of course, if you're concerned about your credit score, you may want to reconsider. Carrying high balances compared to your credit limits will greatly impact your credit score. Having too much debt impacts your debt-to-income ratio, which is also used when determining your score. All of this makes everything else you finance more expensive. Think of the difference an interest point or two makes on a mortgage or a car loan. Keeping balances down helps keep your credit score up, making you less of a credit risk to lenders.

Option 2: File for bankruptcy. Bankruptcy is a viable option for some people, but it's not appropriate for every situation. You don't want to use a sledgehammer to crack a nut. Many people who file for bankruptcy truly have no other choice. In fact, the courts are very strict about ensuring that only those who truly need bankruptcy protection will get it. In a bankruptcy filing, many of your assets could be liquidated to pay your creditors, and hiring an attorney to lead the process can be very costly. Bankruptcy will also leave a stain on your credit report that will stay for many years. Bankruptcy should only really be considered once all other options have been exhausted.

Option 3: Debt consolidation. Out of these options, debt consolidation is the simplest, and the safest. It allows you to responsibly get out of debt without the dire consequences of doing nothing or filing bankruptcy. Any consolidated debts will be combined into one monthly payment date of your choosing instead of owing several bills at several times of the month. Also, many companies will lower your interest rates and waive fees that have incurred once you have consolidated your debts.

Schedule a FREE debt consultation with one of our certified counselors!

Or, call us at (855) 438-3759 to speak with a counselor now.

What are the benefits of debt consolidation?

If you decide to enroll, the credit counseling agency will send proposals to the creditors that you've included on the debt consolidation program. It's important to know that a reputable non-profit agency will have pre-exsisting relationships with all major creditors and will already know what these creditors will and will not accept as a monthly payment.

Nearly all major credit card companies will offer benefits to consumers who participate in this debt relief option. These benefits are all designed to allow consumers to pay their balances down on their own, while encouraging them to build savings. Typically, these benefits include a reduction of the interest rates, elimination of certain fees, and re-aging past-due accounts to a current status. These benefits can pair down your debt by a considerable amount.

By reducing the interest rates – by an average of 64% - consumers can see average monthly payment savings of about 25%, which,depending on your balances, could equate to hundreds of dollars of savings every month. Most importantly, consumers are able to pay these accounts in full in an average of about 50 months, with the approval and cooperation of their creditors and without having to file for bankruptcy.

How to get started with debt consolidation

As you can see, for a lot of people, debt consolidation is a safe, affordable, and responsible way to pay off your credit card and other unsecured debts. Keep in mind that one of the most important factors in this equation is choosing the right agency. There are hundreds of agencies across the country, and many of them are reputable. What you want to be sure of is that the agency is non-profit, has a good rating with the Better Business Bureau, has a high rating with ConsumerAffairs, and maintains quality standards. Agencies affiliated with associations like the Financial Counseling Association of America (FCAA) must adhere to industry standards that ensure customer satisfaction and the proper management of consumer accounts.

Fortunately, you've already found Cambridge Credit Counseling. We maintain an A+ rating with the BBB, we are the top-rated agency on ConsumerAffairs.com, and we have a 99% customer satisfaction rating. Our counselors are all nationally certified debt experts with an average tenure of nearly 15 years helping consumers just like you!

We invite you to speak to a counselor now by calling (855) 438-3759, or complete the form above to schedule your free counseling session.

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