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» Bill consolidation

By China at 3:42 PM

When a person begins to accumulate debt, they usually continue in that direction. Once started, this is a cycle that is very difficult to break. Debt continues to build. When a payment is missed, additional fees are applied. Sometimes, one missed payment can result in higher interest rates for all outstanding debt. Soon you have no idea how to cope with this debt and late fees, over your limit fees, and interest rates combine to make your financial situation completely unmanageable. This is the time to consider debt consolidation.

The first decision you need to make is how to approach debt consolidation. Generally, you must find one credit card account with the lowest interest rate and highest credit limit. If necessary, you may have to choose two accounts for consolidation if you do not have the credit limit necessary to consolidate all of your bills. Once you have found the best possible consolidation account, proceed to transfer your balances to them. Often, banks and credit card companies make offers of lower rates if you will transfer other account balances to them. This can work to your benefit while you are trying to regroup and regain your financial footing.

Once you have established the bill consolidation portion of this plan, you are now in a position to begin a serious effort to reduce your debt. It is generally advised that you choose one account to be paid off ahead of the others. This would probably be the account with the smallest balance. Psychologically, paying off an account will enable you to feel successful and motivate you to continue with your plan of action. When this is accomplished, you will have one less payment each month and will choose the next lowest balance account as your target. Again, minimum payment must be made to existing open accounts while you are putting any additional available funds towards the target account. Continuing this plan faithfully will reward you with a debt-free status in a specific period of time. The key to its success is to cancel the credit cards as they are paid off and resolve to no longer purchase anything which you cannot afford.