Debt consolidation is the exceptional financial tool If you are having hardships on getting rid of your credit card debt, or if you want to. This way of managing debt is paying off all of your existing credit card debt and replaces it with one, easy to pay loan.  

Debt consolidation loans have a more efficient interest rate than credit cards most of the time, and even has lower monthly due. That means your monthly payments are more economical and pay less in interest over the timespan of the loan.

Does Consolidation affect your Credit Card Debt?

The debt consolidation process does not have any effect of how your credit card work.  The interest rates of your credit card debt will not go up or go down because you’ve paid off your balances, and you could not obtain any payments just because you have no balances every month.

How does debt consolidation work? In essence, you might have to take a large loan, use the funds to reimburse all your creditors and make monthly loan payments. The loan can be obtained through debt relief companies or your bank or through a home equity loan if you own a home.

It is up to you to shut down your credit cards to prevent fraud or reuse it to ensure. Whatever you do to your credit card whether you close down the cards or leaving them open won’t affect your loan.

Using Credit Cards after Debt Consolidation

Although it depends on what case you are in. you don’t have to close your recent accounts counting that you have good credit and a limited amount of debt. You can avail a balance transfer even debt consolidation loan without a hindrance. Acquiring a balance transfer credit card never comes with restrictions.

If anyone feels they are drowning in credit card debt, most of the people are resorting to debt consolidation as an immediate solution to the problem. Well, consolidation is a practical option for most of the applicants, everyone must understand what consolidation is, and what are the responsibilities before engaging to a consolidation loan. In most cases of consolidating debt, After you consolidate, you can still use your credit cards, but that doesn’t mean you should.

Common Beliefs of It

Most of the people who are done consolidating their loan they replace their credit cards right away, many people will go down to a conclusion that when you are consolidating your debt, it means that can you no longer use our credit cards many people assume that debt consolidation means that their credit cards can not be used anymore.

As a matter of fact, debt consolidation only diminishes your credit card balances into zero. Your credit card account will not close or even change the way it works before. While various people choose to close down their credit cards after going through the debt consolidation process. Those processes are not mandatory.

You may have encountered some creditors that are very promising, and they offer some too good to be true contracts that may attract you. Credit card debt forgiveness is actually rare and challenging and can cost you too much if you are not careful. So you’re going to be in serious trouble.

You have to be convincing to persuade your creditors, who don’t have the means to repay your debt, will probably not change your situation. If you manage to conclude an agreement with a Florida debt settlement company, the creditor is absolutely certain to report your debt.. The forgiven debt is considered taxable income.

As a supplementary, keeping their credit cards open is a majority choice a lot of people.  Most of their cases, In case of an emergency or some other situation, they want to keep their credit card open, they didn’t shut down an account they’ve had for a long time because they think it might lower their credit score.

Just for Keeps

A scenario that may lead to embargo your credit card or you can’t use it anymore is when you use one credit card as a balance transfer tool. You transfer the balance from several other credit cards, for example, and the amounts transferred are close to or at the card credit limit to which the balance has been moved. As a result of it, you won’t be able to use the card to make purchases until you settle your balance.

You a have choice to cancel several accounts that are recently paid-off when you consolidate your debts. Of course, if you cancel those certain accounts, you can’t use it anymore. Closing your account is a way to discipline yourself from keeping on using your card, but that may also inflict a negative impact.

Shutting down one of your accounts might actually lower your credit score, most of the case is if you have your card for a long time and you settle your payments timely and has a good record.

“If you’ve decided to negotiate on your behalf after weighing your options, it’s time to call your credit card company. First, ask for the department that handles debt settlements or collections. You may want to prepare a script beforehand, so you know exactly how to frame your request.

Clearly and politely explain your financial situation and ask for exactly what you want. The initial answer may be no, but that doesn’t mean you can’t be persistent — even if it takes multiple phone calls.

Document every conversation you have. Write down the names and job titles of anyone you speak to so you can reference them in follow-up calls if necessary.” says Satta Sarmah Hightower


Remember that these services that debt consolidating company offers are not free. There is some part of your total debt are charged for settling you. These techniques  require you to settle payments to your lender for months before your company makes settlements for you.

If your company is authentic, then it is fine because they need to gather fundings in order to bargain and pay off your debts in a single payment, but if your company that is engaging with is a less renowned company, then it could risky for you.

“Be cautious and do your research before engaging with a settlement company. Look for a company that does not charge their full fee up front and offers a money-back guarantee of at least 30 days if they are not able to help you.” says Emilie Burke

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