Disadvantages of Consolidating Credit Cards

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Does Consolidating Credit Cards Hurt Your Credit?....5

After consolidating credit cards, a person is still at a disadvantage because they have to pay off the debt, and credit card companies will notice that this person is in trouble. Find out how credit card consolidation can hurt a credit score with help from the owner of a debt negotiation company in this free video on debt and money management.

Part of the Video Series: Debt Consolidation & Management
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Video Transcript

Hi my name is Peter Repak. I'm the owner of Clear Financial LLC. We are a debt negotiation company and I'm going to tell you about what are the disadvantages of consolidating credit card debt. Well, it's a very interesting subject, because, you could consolidate credit card debt or you could consolidate your debt into one. But that really is not going to accomplish too much. What it is going to accomplish is that you are going to shuffle your debt into different format. And what's going to happen is you are still going to end up with the credit card debt. You are still going to end up with the same amount of money that you owe but in a different format. It really doesn't help you to consolidate your debt because, you didn't accomplish anything. What you have done is you just put it into a different format. Now why is it a problem if you consolidate it? Automatically the credit card company will find out that you're having trouble. That will lower your credit score immediately. The lender that could actually try to lend you money will automatically have a red flag that you tried to consolidate your debt into a one lump sum. That is going to give them a red flag. That will hinder your ability to actually acquire credit in the future time. So what you need to know about consolidating credit card debt or consolidating any debt into one. You can do it but as far as to accomplish anything with it, that's not really going to make too much sense to you. The only thing that you also have to know about it. You could do this in case you can lower your interest rate and it's not an incredibly excessive amount. If it's not an incredibly excessive amount and it lowers your interest rate, yes you can do that. That can help you in the short term. But the number one thing that you want to do is get out of that debt. Again this is Peter Repak from Clear Financial LLC. I am the owner of the company. It's a debt negotiation company. Thank you for watching.

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