(You can learn more about debt management and debt negotiation companies in our Debt Settlement & Negotiation topic area.) Below are some of the main factors you should consider when deciding whether consolidating your credit card debt is in your best interest.
Benefits consolidating credit card debts
Each month, you make a single payment to the debt consolidation firm and it distributes a portion of your payment to each of your creditors.
If you are struggling to pay off multiple credit cards, consolidating your debt may allow you to reduce your interest rates and lower your monthly payment.
However, a lower monthly payment can mean a longer repayment term and more interest paid over the life of the loan.
(To learn more about managing credit card debt, see out topic on getting out of credit card debt.) Consolidating your credit card debt essentially means combining all of your debt into a single loan or paying your creditors through a single monthly payment.
You can do this by taking out a consolidation loan or using a debt consolidation or management company.