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credit cards are fast becoming the preferred medium of exchange all over the world.
Most people carry multiple credit-cards at a time and prefer to use them instead of cash.
This practice oftentimes leads to unmanageable credit, card debt burden.
In order to overcome this problem, consumer credit-card debt consolidation loans play an important role.
Under this method the consumers can consolidate their various credit, card debts into one and reduce their current interest rates, thereby alleviating the crisis.
Advantages Whenever you default on any account, the interest and financial charges get stacked over your debt and the total debt amount grows.
With debt consolidation you can eliminate the portion of your total debt built up by accrued interest and penalties and consequently reduce your total debt amount.
Thereafter, you only have to make a single monthly payment to the consolidation company and the company will disburse the funds to all your creditors, on your behalf.
Your counselor will negotiate with your creditors and turn up with reduced rate of interest.
The counselor will also draw up a repayment plan for you, so you can save money for emergencies.
This will lessen your chances of defaulting on the consolidation program.
Since the consolidation company negotiates with the creditors and collecting agencies on your behalf, you are saved from the hassle of facing harassing collection calls.
Disadvantages The main risk associated with enrolling for a consumer credit, card debt consolidation program is that you can end up paying more over a longer period.
If you have opted for secured debt consolidation, your property may also be at risk.
To make this program a success, you must make some changes I your lifestyle, such as you should avoid using multiple credit-cards and use cash instead of cards.