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Questions & Answers > Debt Management Help > What is the consolidation of credit cards and debit cards?

What is the consolidation of credit cards and debit cards?

By Derek Brown
Published: Tuesday, March 16th, 2010

Basically the process of settlement of loans through debt consolidation is easy and here most loans are usually of higher amounts. Thus consolidating them is the ideal way to avoid too many debts and get rid of unnecessary confusion regarding payment options. These days there one can see a drastic increase in the number of credit card debts with the growth of the use of the credit and debit cards. Also these debts have crossed the limits of loans and often results in high use of credit cards. 

Too much use of credit card results in long bills that often exceeds the amount of debts in loans in many cases and there are various means of managing credit card debts like: 

  1. Consolidation of credit cards- The process of consolidation of credit cards has been suggested to the consumers because the interest rates of the loans are much lower. Those with very high credit cards debts end up paying very high interest fines and dues. Hence, the individual feels that they won’t be able to repay the same, and it is best to stop the use of the credit cards. Through the means of easy loans you can consolidate these charges and get lower interest rates and the option of a single monthly payment which will take care of these bills.
  2. Credit card debt reduction- Here the credit owner tries and negotiates with the bank or can hire professional help to negotiate with bank. As a result the charges to the credit cards can get drastically reduced and the credit card owner may also be given relief from high interest rates with options of a settlement. The credit card company can reduce the amount on the pending bills by almost 50%. 

But it should be kept in mind that debt settlement would still provide you with lower credit scores as the debt is still not being cleared. One of the safest ways to avoid all credit card debts is minimal usage. Avoid keeping a lot of credit cards and use them only in emergencies. This can be reserved for holidays or when you actually fall short of cash instead of regular expenses.

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