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Jevon, CT, South Africa This is also a loan and means another debt in your account. It helps you consolidate your other debts, and thus to bring down the interest rates as applicable.
Here’s how credit card consolidation works: You first decide if you want to take out a new loan, open a new credit card or enroll in a debt management plan (more on that later).
Whichever option you choose, you will use it to pay off your multiple balances.
When you take loans from many lenders, you have multiple debts. This also increases the risk of defaults and you have additional pressure of repayments.
You can get your free annual credit report from each of the three major credit reporting agencies — Trans Union, Equifax and Experian.
And, Credit.com’s free credit report summary can help you understand what’s inside your credit report. There are several safe and smart ways to consolidate credit card debt, so you’ll want to research them before deciding what’s best for you.
If you have bad credit, you can consult the dedicated section: Debt Consolidation Loans for Bad Credit.
The best way to consolidate your debt will depend on your personal situation.
Then you’ll only have one monthly payment: the loan, the credit card or the debt management plan.