Is consolidating credit card debt good
The interest rate depends on your credit profile, and it usually doesn’t change during the life of the loan.
A debt consolidation loan is a good strategy if you: In this article, you can read about: Nerd Wallet’s top lenders for debt consolidation How to compare debt consolidation lenders How to consolidate debt successfully If your credit is good, you can apply for a 0% interest credit card and transfer your existing balances to it, which could save you money.
Also, not all debts can be discharged in a bankruptcy. Collection accounts fall off your credit report after seven years.
Once the introductory period expires, the rate you’ll see on a balance transfer card is usually higher than on a personal loan.
You’ll also have to avoid the temptation of making further charges during that time. Fixed payments ensure that you’ll pay off debt on a set schedule.
However, consolidation is not a foolproof solution.
When it’s not done correctly, it can actually lead to more financial trouble than what you had when you started.
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Myth: Debt consolidation saves interest, and there’s one smaller payment.