It is something that you hear about frequently. A person gets their very first credit card, or maybe a couple of them, and in no time at all, they go wild on shopping sprees and start spending their “plastic money” like crazy.
Then, in short order, those bills start mounting and the monthly payments get to be more than they can deal with. And, if they end up being late or missing a payment, then they will discover that their interest rates have doubled or even tripled from where they started and the financial woes really hit. When these situations happen, credit cards loans can be a godsend and a good way to turn things around.
CREDIT LOAN
Such a loan has helped thousands upon thousands of people to get untangled from the web of credit card debt that they can so easily get themselves into and start to take control of their finances again. These loans can help people cut years and years from the time it would take them to pay off their credit cards debt and mounting interest that gets added to their balance every month, especially if they have gotten themselves into the predicament of only being able to pay the minimum credit card payment due each month.
CREDIT CARD LOAN
The idea behind credit cards loans is to take all of the balances from the various credit cards that a person has and pay them all off with a loan that has an interest rate that is fixed and typically much lower than the interest rates on even the best credit cards in the industry. This consolidates the debt into one loan so the borrower only has to make one payment a month, rather than juggling two, three, four or more payments to different credit card companies every month.
Such a loan is also a very effective way of helping people to better budget their money by having a monthly payment that is fixed. And, because the loans for credit cards debt consolidation carry a lower interest rate, the result will not only be a shorter payoff period but a lower monthly payment than what was being paid to the various credit card companies each month. This can really help people to get off the slippery slope of increasing debt and start to get a firm financial footing that can serve them well for many years in the future.
DISADVANTAGES
However, a credit cards loan can be dangerous if people have not learned their financial lessons and have learned how to budget and control their spending. Those who decide to pay off their credit cards with a consolidation loan should close out all of their accounts and learn to live on cash, or at the most, keep just one credit card that has the best interest rate and hold it in reserve to be used only in the case of emergencies.
Without taking these important steps, people can soon find themselves with mounting credit cards debt again and they may not have the option of taking out any more credit cards loans if their debt-to-income ratio has gotten too high. Because of this, is it a good idea to also seek out some financial counseling and create and adhere to a strict budget that will help pave the way toward financial stability.
