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Choose the Right Credit Card Debt Consolidation Company

Choose the Right Credit Card Debt Consolidation Company

Get rid of your debt faster with debt relief

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Daniel Cohen
UpdatedJun 19, 2024
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    4 min read
Key Takeaways:
  • Review the different debt consolidation options available.
  • Understand how your finances affect your consolidation choices.
  • Find the debt consolidation company that is best for you.

Finding the Right Credit Card Debt Consolidation Company for Your Needs

Almost everyone uses credit cards. Not everyone with a credit card has credit card debt. Many people pay their cards in full each and every month. However, there are tens of millions of Americans who have credit card debt. If you do, you can save money if you find a way to pay your debts off more effectively. One good option is debt consolidation.

Debt consolidation comes in different forms; there are different types of credit card debt consolidation companies. It's important that you understand the differences, so you find the right solution- one that fits your goals, credit rating, and ability to pay.

Whatever kind of cards you hold, there is going to be a debt consolidation solution that can help you. If you are holding a strong financial hand, the best credit card consolidation companies that can help you are going to be different than if you are struggling to pay your bills each month.

Three of a Kind

If you have a very strong hand, like a full house, you won't need debt consolidation help. A certain percentage of Americans go through life with no financial bumps. However, even people with good financial habits, strong credit, and stable income can end up with a credit card debt problem. Sometimes it is due to an unexpected expense or a decrease in income. Other times, it is a matter of poor spending habits- spending more than you can afford.

You may be holding a good, but not great hand, like a three of a kind. If you have strong income and good credit, but your credit card debt has started to get out of control, there are consolidation companies that can help you. If you have good credit and strong income, then look the services of two different types of credit card debt consolidation companies:

  1. Mortgage Companies- If you own a home that has equity, a cash-out mortgage refinance has the cheapest long-term interest rates for a debt consolidation loan. You need to meet the lender's requirements for debt-to-income ratio and credit, too. If you do, you can save money by paying off your higher-interest credit card debt. A cash-out refinance is an even more attractive option, when interest rates are at historic lows.
  2. Credit Card Companies- When you are working to pay off credit card debt, working with another credit card company may seem like working with the enemy. Still, if you have excellent credit, using a balance transfer offer to consolidate debt can save you money. Pay off as much of your debt as you can during the initial low-interest period. The low rate that comes with a balance transfer offer doesn't last forever. Make sure you know how long your low-interest rate stays in effect and what your new rate will be once it adjusts.
Quick tip

The Debt Coach is a free tool that helps you figure out the best way to pay off your debt. By analyzing your individual situation and goals that you specify, Debt Coach recommends one of five proven strategies for becoming debt free.

pair of threes

when you hold a weak financial hand, the type of credit card debt consolidation companies that can help you are quite different. you won't qualify for a loan that will improve your position and applications you make to transfer balances will be turned down. you need to look at more aggressive forms of debt help that are designed to assist people with financial problems.

  1. credit counseling- consumer credit counseling programs will offer a debt management program to you, if your credit card interest rates are a big problem for you. you will make one monthly payment to the program, which is divided and sent to your creditors. if you can afford the monthly payment, then you can pay off all your enrolled debt in about five years. with reduced interest rates, you pay off your debts faster and save money.
  2. debt settlement- debt settlement programs are best suited for you if you are experiencing a financial hardship. either you can't make your monthly payments or feel that you are not able to make them for much longer. debt settlement can resolve your debts in about 24-48 months, usually for about 70% of what you owe when you enroll in the program.

finding the best credit card debt consolidation companies

if you play your cards right, debt consolidation can be a very effective way to save money and pay off your credit card debt more efficiently. once you narrow down the type of debt consolidation company you want to work with, it is important that you take the right steps to find the best company that offers that service.

Debt statistics

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Auto loan debt was $1.62 trillion and credit card was $1.12 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Tennessee, 32% have any kind of debt in collections and the median debt in collections is $1892. Medical debt is common and 18% have that in collections. The median medical debt in collections is $888.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.