Have you consolidated your credit card debts, and find that things are still
getting worse? A lot of people consolidate their credit card debts. The idea is
to repay the debt back with simpler interest rates and monthly payments to a
single credit card company.
1. Relaxed
attitude
Credit card debt consolidation brings immediate relief to the borrower. There
are no multiple payments now, no nagging calls, no keeping of record, and if the
borrower, got a good deal the interest rates are also low and so are the monthly
payments. All this is too comfortable to drive the credit card holder into a
false sense of security. It is good to remember that there are debts are just
consolidated. Few small things now become one big and it has to be repaid, that
too with interest. So, forget the minimum monthly payments, get serious on that
debt and repay it as soon as possible. This will keep your credit report in good
shape. Else this relaxation will cause endless tension and could lead towards
bankruptcy, which is disastrous.
2. Uncontrolled spending habits
It is this reckless spending on
useless items that got the credit card holder, this trouble of credit card debt
in the first place. And now after the credit card debt consolidation, if the
temptations again drive a borrower’s spending habit, he is doomed. Remember
small things here and there add up at the end of the month and can make the
whole process of debt consolidation useless.
3. No money management
Multiple credit cards? No budgeting? No
keeping track of expenses? No savings plan? If this is the financial regime
prevailing in a borrower’s life, debt consolidation simply won’t work. The need
of the hour is that the borrower takes control of his finances and try to become
debt free. The good financial habits acquired in the process of repaying debt
should last a lifetime and ensure no further consolidations are necessary. Don’t
keep more than one credit card unless absolutely necessary. If a credit card
comes by mail cut it into four pieces and mail it back to the credit card
company.
Debt consolidation is only a temporary solution to any borrower’s debt problems.
It is there to make your repayment process easy, not to forget about debt and
relax. Debt consolidation without proper attention to above mentioned
three factors can ruin your entire effort. On the other hand if you take care of
these three things carefully
, a fantastic financial future awaits you.
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