Escape Finance Charges With Credit Card Consolidation
Credit cards are not a friend to most of us; in most cases, they are the enemy personified – an enemy we simultaneously love and hate. With the cost of living on the rise, and salaries not seeming to keep pace, we often look to credit to help us temporarily afford the luxuries we want, and even the basics that we need. The key word here is temporary because as much as the credit cards allow us to cheat reality in the short term, nothing is for free and the bill will always come due.
The problem with credit cards – as we are undoubtedly aware – is not just that we can’t afford the base cost of what we have purchased; the finance charges often applied by the credit cards can make the purchase completely unaffordable. As we charge more and more money onto our credit cards, the interest rate charges compound and our monthly payment increases. As the payment increases, we are often less able to pay more than the monthly payment and before you know it you are only paying the interest; the principal of the debt never budges. At this rate, you are less likely to ever see the pay off of the debt, and until then you are stuck in a never-ending cycle of minimum payments and accrued interest. But it doesn’t stop there.
The credit card’s finance charges are made up of a number of different charges including the interest rate. But beyond the interest, there are transaction fees, service fees, and late charges should you pay your minimum payment even a day late! Before you know it, you are nickeled and dimed to death and with very little recourse as you continue to owe the credit card company more and more money.
At this point, many people turn to a debt relief agency to help them weed through the complexities of their debt and set up a credit card consolidation. Ideally, a credit card consolidation eliminates the high-interest credit cards by transferring their balances to one, low-interest card. This eliminates multiple monthly payments and allows you to pay down your debt one payment at a time. With lowered interest rates you can add more money to paying down your principal debt and finally see the light at the end of the tunnel!
