What to Expect When Consolidating Your Unsecured Credit Card Debt

If you have a lot of credit card debt that is piling up, you may want to consider unsecured credit card debt consolidation. When you choose this option, you will be consolidating all of your debt into one bill instead of many bills.

But this type of debt consolidation is not just convenient — it can actually end up saving you money. When you decide upon debt consolidation, you are usually struggling to make the payments on all of your credit cards. You may even find that making the minimum payment is too difficult and that you continue to fall behind in debt.

What Does a Debt Consolidation Do?

A debt consolidation company will access your financial situation and contact all of your credit card companies. They will explain to them that you have placed your credit in their hands and negotiate a lower interest rate for you. They may even be able to negotiate away late fees. Most credit card companies will cut their minimum payment when they hear that you are with a debt consolidation company.

The debt consolidation company will then have you pay them a monthly fee that covers all of your debt. They, in turn, will make the payments to the credit card companies.

How Does Debt Consolidation Affect My Credit?

Debt consolidation will affect your credit adversely, but not as badly as a Chapter 7 bankruptcy. The credit cards that you consolidate will be cancelled. Many companies will advise that you keep one credit card out for emergencies. When the debt is consolidated, the credit card company will cancel your card so that you cannot charge any more money. That is the price you pay for getting the lower monthly payment and interest.

What Else Does a Debt Consolidation Company Do?

Most debt consolidation companies will also offer you credit counseling. Their goal is to get you debt free. Your monthly payment must be paid on time and is usually taken directly from a savings or checking account. They will not accept a personal check for payment. You may also pay them with a cashier’s check or postal money order.

Is Debt Consolidation Free?

There is usually a donation charge for debt consolidation, although some states are clamping down on this practice. This is usually advertised as a free service, but often, the company will include a “donation fee” in with the monthly payment. Many consumers do not mind this as their monthly payment is still lower than what they were paying before and they feel that they are making headway with their debt.

An unsecured credit card debt consolidation is similar to filing a Chapter 13 bankruptcy, but without the big hit to your credit rating, and you do not need an attorney.

DebtGuru.com (http://www.debtguru.com/unsecured-credit-card-debt-consolidation.htm) offers you free information on unsecured credit card debt consolidation and can point you in the right direction to get your debt management back on track.

Nobody will intend to declare their bankruptcy!

However, one had the ultimate tendency as there are no other options. It’s the only way you can also work out a good credit score standing to get approved for getting an unsecured credit card.

HERE ARE SOME IDEAS TO GET AN UNSECURED CREDIT CARD AFTER BANKRUPTCY:

1. Be mindful when dealing to credit card companies upon your application.

It might be difficult for you to apply for a secured credit card after bankruptcy but at least getting a bad credit unsecured credit card which require no security deposits can be a good start to build up again your credit score. Applying for a credit card after declaring bankruptcy may not guarantee an approval so you have to find one that accepts borrowers even you had past bankruptcies. Read the credit requirements before doing your application.

Again, carefully study the credit company BEFORE you apply!

2. Be wise on using your approved credit card.

Your goal is to have balance at the end of the month. Whether you get approved for a secured or unsecured credit card, never use it to just anything you want. Remember that your priority is to pay your important bills and expenses.

3. Never apply or reapply to lenders you owed before your bankruptcy.

Lending companies you owed money for financing your business may encourage you to borrow again upon hearing of your bankruptcy filing. But don’t stick with them, it won’t be a good idea to do the same mistake the second time around.

After considering these steps, the next thing to do is to build your credit rating. But how can you do it?

The length of time from the start of bankruptcy will determine how soon you can build a better credit rating. Applying for either a secured or unsecured credit card will be a primary step and you really have to make sure you are paying on time clearing your balances at every month end.

It’s a good strategy to keep a low debt to income ratio. Then start looking for good opportunities to apply for a credit card. The combination of loans and credit cards will absolutely build again a better credit profile. It will enhance your opportunity to get approved on your next unsecured credit application.
Always at your service!

Want to know more about the possibility of applying for an unsecured credit card? Read more here http://www.newhorizon.org/credit-info/is-it-possible-to-get-an-unsecured-credit-card-after-bankruptcy/

Looking for unsecured credit cards for people with bad credit? Apply here http://www.newhorizon.org/Info/unsecured.htm
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