Due to the recent financial recession, many consumers have found themselves in a position where they never thought they would be. Many Americans these days are dealing with overwhelming credit card account debt. Being an advocate of financial stability and, understanding how third party affiliation with debts can cause harm to FICO ratings, I decided to go on a search for consumer debt relief options that didn?t involve third parties.
When I started my research on debt relief programs and how they work, I never thought I would find what I found. One of the most well known debt relief options was one that people really could do easily on their own. Have you heard of debt consolidation? Well, many consumers have. As a matter of fact, there are tons of companies out there that get paid thousands of dollars to do it!
The process of debt consolidation is the process of rolling multiple debts into one loan. The way this helps is simple. If done right, the new loan will have a much lower annual percentage rate than the old charge card loans did. This helps Americans to pay their debts faster without having to spend so much in interest and finance charges. Another benefit of debt consolidation is that people no longer have to worry about multiple accounts. Their debts will have one bill with one lender.
I found this to be a great way to go so, I looked into what third parties actually do! What I found was appalling. In most cases, third party debt consolidations try to show the lenders a financial hardship that the people are going through. In doing so, they use this as a reason to offer a low annual percentage rate. The bad part about this is that this process causes credit card account companies to close the accounts. This action detrimentally affects the FICO ratings of people who do it because the closure of accounts leads to a 100% debt to credit limit ratio on these accounts.
Once the accounts are closed, the debt consolidation company helps the consumers to manage their payments by consolidating all payments into one number and having the Americans send that payment plus a service fee to the consolidation company. The consolidation company then disperses the payments as necessary.
Knowing that this process has a detrimental affect on FICO scores, I decided to see if I can twist the debt consolidation process to only provide positives for people. And, well, I have! The answer was balance transfer credit card accounts. Balance transfer credit cards offer people low promotional and long term APRs in return for consumers transferring their balances from other lenders. All Americans need to do to consolidate their debts is apply for a balance transfer credit card with a lower interest rate than what they are paying! Old charge card accounts don?t get closed so no negative affect is caused to credit and there are no third parties that people have to pay! Balance transfer credit card account debt consolidation is the best way!
This article was written by Joshua Rodriguez and is brought to you by:
JEMCreditCards.com: Skymiles Credit Card Offers | The Best Credit Card Offers
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