Credit card debt is a problem for numerous Americans but there are various methods which consumers have been using to erase the credit card debt without turning to credit card consolidation loans. Many consumers do use credit card consolidation loans as a way to group various debts into one location, which can be easier to manage since there is only one monthly payment and one interest rate to combat.
However, there are financial advisors who argue against using credit card consolidation loans, or any debt consolidation loan, as the overall costs can be much greater than had separate debts been dealt with one by one. Various credit card repayment options can be made available, again, like credit card balance transfers or consolidation loans, but top financial advisors like Dave Ramsey often suggest paying down one credit card at a time.
While there may be disagreements in this area as well, consumers who have successfully erased their credit card debt by attacking one credit card at a time have typically done so by either paying on credit card debts from the smallest amount to the largest or from the highest interest rate to the smallest.
Arguments in favor of paying down credit card debt one by one usually center around the fact that smaller principal amounts can be easier to handle, rather than one large principle on a consolidation loan. Even if a low interest rate is offered on a credit card consolidation loan, the repayment timeframe could allow interest to accrue more so than had smaller principle amounts on individual credit cards been paid off one by one.
Consumers who may have worried about missing credit card payments or who simply felt that they could not make even minimal monthly payments on all of their various credit card debts are typically those who turn to consolidations. While some individuals have gotten into a situation where they have to pay more over the long run to avoid missing credit card payments presently, consumers who may be able to afford attacking their credit cards one at a time could be better off overall.
Understandably, each credit card debt situation will differ from consumer to consumer, but again, financial advisors often suggest that cardholders attempt to form budgeting and repayment plans which allows them to meet minimum payments on all cards except one, on which they focus as much money as possible. While this method has been successful for consumers over the past months, consumers often benefit more so if they simply look at their financial situation and run the numbers to see which repayment method might be best for them.