Climbing Down from Credit Card Mountain
by Ellise Walsh

There are many mountains to climb in life, but one peak few want to visit is credit card mountain. It is a destination filled with high interest rates and impossible monthly payments. Climbing down from that mountain and taking control of your finances back is difficult, but after you have made the journey you will be glad you did.

Unfortunately, there are no primary school or even college courses on how to handle credit cards and debt in general in an effective and responsible manner. Given the general lack of consumer education in financial matters, it is no surprise that so many people find themselves charging more than they can comfortably afford to pay back.

Once that credit card debt has been allowed to accumulate, it can be very difficult to get rid of it. The high interest rates on most credit cards mean that it could take decades to pay off even a small balance by just making the minimum payment. To get control of credit card debt and get a fresh start, it is necessary to consolidate that high interest rate debt into a loan with more favorable terms and a lower interest rate.

The so-called debt consolidation loans are becoming increasingly popular, and they have helped consumers save many thousands of dollars on their debts. There are many types of debt consolidation loans. Some are personal loans, while others are home equity loans or lines of credit. The debt consolidation loan that is right for you will depend on your own unique circumstances, and there is no one loan that is right for everyone.

The most important part is recognizing the problem and doing something about it. It can be difficult to admit that we need help, but the sooner you do so the easier it will be to get control of all that high interest rate debt.

The idea behind a debt consolidation loan is to wrap all your high interest rate debt into one loan package which has a lower interest rate. The borrower then uses the funds from the debt consolidation loan to pay off the balances on credit cards, auto loans and other outstanding high interest debt. While the interest rate on the debt consolidation loan will depend in large part on the borrower’s personal credit history, it is almost certain that the rate will be lower than that on the borrower’s credit cards.



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