Credit card companies cannot possibly eliminate all their debt at once. Any debt that is still outstanding can be transferred to a new debt consolidation loan. But many people have a hard time concentrating on the fact that a new debt consolidation program is a daunting and expensive task, and only make it worse with each passing passing month. These people are easily frustrated, even paranoid, after reading all the negative publicity that can come with a new debt consolidation program.
Many creditors treat debt on credit cards as if it were free money, they lend you money and then fail you once that money can no longer be obtained. The result is much the same. A lot of people think that it is a scam to get money from a credit card company, to pay up your problems with a current credit card. Most people are actually very relieved when they learn that their credit card debt is only partially to blame. But only half way there.
All debts can be used to finance newer debt consolidation programs. But there are people who use them for everything; credit cards, mortgages, car loans, student loans, government loans, and even personal credit cards. Some of them even get out of bankruptcy. But that is not the only way to go. The new debt consolidation program eliminates almost all debt incurred by these people.
Many people who have no other means to pay off their debt. No organization has the resources to compete with the consumer frenzy that is sweeping the country. Consolidation loans and credit cards are no different. With consolidation loans and credit cards, consolidation companies take what they borrowed, convert it into a new loan, and distribute it throughout your household. This is the ultimate financial tool that allows you to refinance your personal loan for a lower interest loan and save yourself money in the process.
So credit card debt consolidation is no different from everything else that is being offered! Anyone can save a family member over time, either if they opts out or if they make a plan to take out a new loan. But the important point here is that the entire financialization of credit card debt is not done to save the credit card debt itself. The whole purpose is to consolidate the unsecured debt of the credit card holder into the unsecured and lower-interest debt.
There are two main reasons a consolidation program is needed: first, it saves that the new debt consolidation loan is being used to consolidate your debt so it is one single sum instead of multiple bills (see “Take Out Your First Mortgage Credit” below). These people are really very powerful and will not let themselves go into the debt they have already accumulated. Second, they will not save a family member long enough to refinance their loan. In addition, these people will just waste the money that was put into them from consolidating their old loan debt.
Understand the following phenomena;
a) All debt should be used to finance now a new debt consolidation program; if you can consolidate your credit card debts into only one low-interest debt only make sure that your family members who have already made a plan to pay their debt will be able to make a big plan with their young lives and savings.
b) Some people have debts they can pay off by taking it out again; that is the only way they can make it work.
c) Some people have to take out their credit cards again and pay out what they owe each month. They will have to make the monthly payments anyway because it will only be counted as a payment on your record. In the long run, consolidation loans will be used to pay off those debts since the government will make an actual tax payment on their loans.
d) Credit card debts will not be able to pay off for a while. After some time, the interest rates on the new debt will be in the hundreds if not thousands of dollars, while the credit card companies will be bankrupt.
e) Many people will be paying as much as 40% of their balance in interest on their current debt, for whom a new debt consolidation program will save 30% or more. However, you should put a debt consolidation loan in case you need to pay it in installments, be careful that it does not say “1% interest only” instead; “2% interest only” means that you will pay a higher interest than the agreed upon rate. Also, do not pay for it in the first place. With the loan in the first place, you will be paying interest on the debt for years and years until you pay it off and the interest rate is lowered to 30%, after which you will have saved very little money.
f) No one can make a big mistake about it; a new debt consolidation program will not be the answer to your financial problems. Making the right decisions for your debt is the key. Just take a look at your credit score.