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The Benefits Of Credit Card Consolidation
Believe it or not there are still millions of people paying in excess of 20% interest on their credit cards! Amazingly, people still have no idea that these high interest credit cards can be dealt with very effectively by using a simple credit card consolidation program.
It is amazing how many people I counsel with that still think these programs are some kind of scam. So, for anyone reading this article, and still not getting it, here is what a credit card consolidation program is, and what it can do for you.
First, the program is controlled or should I say offered usually through non-profit companies, or for profit companies or credit counselors that work as affiliates of the non profit.
Second, the programs were created by the banks in the early 1990’s, or, right around the time that they started charging usurious interest rates, to lower the level of defaults by consumers.
Thirdly, the terms of each program, no matter what company offers it, are all the same. How can this be, you ask? Because their is no negotiation involved in this type of program. The banks tell the originating companies, what new interest rate and payment, they are willing to offer to the enrolling consumer, and what the new payment will be. So, whether you sign up with consumer counseling services of America in person, or New Horizon over the phone, you are getting the same deal, because the fees are all regulated by the states, and the terms determined by the banks.
I know people like Suze Orman are big on referring to one particular company, but you need to realize that these companies, even if they are non-profits are all businesses, and have to pay the bills like every other business.
Fourth, a credit card consolidation program will not directly impact your credit score. However, any credit cards placed in the program will have to be closed, ans anytime you close a credit card, it will have some negative impact initially, on your credit score. Will it be so much of an impact as to ruin your credit? Absolutely not. And, the amount of money you save, by utilizing the program, will far outweigh any credit score impact.
So, I hope this article has been useful to you in terms of clearing up any misunderstanding about what a credit card consolidation program is or is not. If you have any additional questions, please feel free to email me, the author, using the contact information below.
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