Recover from Debt by Credit Card Consolidation
Are you in dire need to recover from your card credit debts? Consolidating your credit card debts will work best for you.
So how credit card consolidation works? [ad#Primer Above]
Credit card debt consolidation as the term says means that you will have to put all your credits together under one creditor. Simply put that you own a number of credit cards such as Visa, MasterCard, American Express, Diners, etc. and your debts already comes to a very disappointing condition that it seems that you can hardly recover from left and right payment. What you can do to solve this issue is to consolidate altogether your card credits into one single creditor card company which offers this kind of program and you will be able to manage your schedule of payment better than having a multiple payment schedule. Multiple payment schedules will eventually break your budgeting. Whenever you failed to pay a credit card or two that you keep, then you will incur another charge which credit card companies normally calls late payment charges. The late payment charge is different from the finance charge.
To illustrate this, we will use the term “cc” short for credit card.
Let us say you earn a monthly take home pay of Pesos 30,000 and 70% of this goes to miscellaneous household expenses. You will be left then Pesos 9,000 to pay your credit card bills. Let us presume that you have three credit cards and you owe cc #1 Pesos 10,000.00; cc#2 Pesos 20,000.00; cc#3 Pesos 50,000.00 and so on depending on how many credit cards you have. Let us presume then that you need to pay cc#1 the monthly payment due for example is Pesos 2,500 on 12th of April 2013; then Pesos 5,000 due for cc#2 due on the 28th of April 2013; and cc#3 is due for payment on the 5th of May 2013 amounting to Pesos 12,500.
The case above shows that you have already over-exposed yourself to credit and your budget for paying this will not be enough. Since you tried to meet your commitment of paying your cards, you will then pay cc#1 Pesos 2,500, cc#2 Pesos 5,000. Even how much you try to find a way to divide your budget for these cards, your money is not enough therefore you have decided to pay cc#3 Pesos 1,500. In such case, you have not fulfilled your obligation with the credit card company whom you owed for cc#3. The credit card company for cc#3 will then charge you a finance charge equivalent to 5% of the amount of your insufficient payment. This is considered a penalty for not fulfilling your obligation. The 5% penalty will be added on top of your original balance. Please note that your original balance is also being charge with 5% finance charge monthly and credit card companies will continue charging the said rate until you have fully paid your credit card balances.
On the other hand, if you have decided not to pay cc#3 of your monthly due on time, then they will kick you again with the so-called late payment charge which normally comes to about 1% of your amount due for the month. This means you have to deal and additionally pay two kinds of charges, the finance charge and the late payment charge.
If you will look at it and will start doing your homework and some mathematics, it will show that you will eventually become bankrupt in the not so far future because of your overexposure in debt. Here is where you should consider consolidation of your credit card debts.
Unless you are willing to borrow money from a friend or a relative with lesser to no interest so you can pay all your cards in full, consolidating your credit card debt is a way out of this extremely worst situation. There are credit companies out there who are willing to pull-in all your debts together at a reasonable interest rate. Sometimes, there are even cases that the interest rates they offer are far lesser than the usual credit card you have applied for in the beginning. They are even able to provide convenient schedule of payment until you find your way out of debt. If you are in this strange situation, you should start looking out for companies and banks that offers consolidation of credit card debts.