Consolidating credit cards pros cons

A local credit union could also be a good place to go when you want to consolidate loans.The Consumer Financial Protection Bureau (CFPB) suggests consulting with a non-profit credit counselor before trying to consolidate your debt.The other popular option is using personal loans to pull together all of your debts under the same rate and account.The same old story is that every credit card user becomes overwhelmed with debt after the Christmas period, which is when balance transfer and consolidation deals start flooding the market.Debt consolidation is primarily designed for unsecured debt (i.e. When you consolidate your debt, you take out a loan to pay off several other debts.This allows you to consolidate the money you owe into one payment.

And if you choose the right card -- one that provides a year or more of 0% interest -- you can quickly make progress on paying down the debt while having a lower monthly payment."If you can’t pay the loan back, you could lose your house, car, life insurance, retirement fund, or whatever else you might have used to secure the loan."Banks and other financial institutions offer unsecured loans for the specific purpose of consolidating other debt.While these may be an alternative, the interest rate can be fairly high..Credit card debt can sneak up on your before you know it.

Christmas time hits, bills come in all at once or personal circumstances arise which leave you with empty pockets.

Mc Clary, whose organization represents non-profit credit counselors, agrees.