Consolidating your credit cards good idea
This can be a problem; lenders of all types rely heavily on those scores to determine who gets loans and at what interest rates.
Consumers with weak credit scores will have to pay higher rates to borrow money, if they can even convince lenders and banks to loan to them at all.
Once the low teaser rate on your new card or loan has expired, any outstanding debt takes on a rate that’s significantly higher — which means consumers might end up spending more money to pay off their consolidated debt than they would have if they had simply stuck with their original loans.
In that type of scenario, consumers will see their three-digit credit scores fall.
Deciding to take out a debt-consolidation loan is far from an easy decision.
The risks of overpaying and the potential damage to your credit score should give you pause, so be sure to explore all your options.
The idea behind a consolidation loan is to borrow enough to cover the balances on your credit cards.When you’re juggling multiple credit cards, managing them all like a pro while paying down the balances can be a major challenge.Wouldn’t it be nice to send just one payment every month and not have to worry about a variety of due dates?There is one possible benefit to debt consolidation, though.Aggressive debt-consolidation firms might be able to negotiate away a sizable amount of consumers’ debt.
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Be careful, as those low interest rates rarely last forever.