Consolidating Credit Card Debt Or Repaying Credit Cards Separately–How Are Cardholders Erasing Credit Card Debt?

Credit card debt has been a problem for many Americans over the past years as a dependance upon the use of credit cards has become more common. However, as many more people find themselves in credit card debt, there are becoming more ways in which cardholders are attempting to erase their credit card debt in a timely manner. Common solutions like credit card debt consolidation loans have been used by many individuals who simply want their debt rolled into one payment per month. However, there are financial advisers who warned against consolidating credit card debt and feel that other methods should be used.

Credit card consolidation loans are often seen as one of the best options for handling credit card debt since individuals who have multiple credit card debt sources and interest rates feel that they will have a better opportunity at erasing their credit card debt if they only have to make one monthly payment and they only are dealing with one interest rate. However, some credit card consolidation loans may extend the repayment time frame on credit card debt, which could be more costly over the long run to a cardholder.

There are those who are in the school of thought that simply budgeting and attacking credit card debt one source at a time will be the most beneficial plan of action. Depending upon one’s financial discipline, this method can be more beneficial since various debt sources will be smaller when separate and the principal amount owed on a credit card will not draw as much interest. One argument against consolidation loans is that a higher principle amount, even on one interest rate may cost more over the repayment lifetime of a consolidation loan since interest has a higher principle on which to build.

However, despite various methods for paying off credit card debt, many financial advisers in the wake of the recession and massive job losses across the nation have been prompting men and women to gain control of their financial life. By spending outside of one’s means to repay, obviously, debt is acquired but also, cardholders typically end up paying much more to erase their credit card debt than they would have if they simply had lived within their financial means.

Getting out of credit card debt is something that many people can accomplish if they practice smart financial habits, but it is the lack of these habits that get many cardholders into their credit card debt situation. While some cardholders use consolidation loans, talk with their credit card lenders, or simply attack credit card debt one source at a time, the consensus among financial advisors seems to be that preventative measures like smart spending are not only the best way to avoid credit card debt in the present but these habits will make one’s financial life easier in the future.