Should I Get a Debt Consolidation Loan to Pay For Christmas?
Let's say that you currently owe $30,000 on four different credit cards. Would it make sense to get a $30,000 debt consolidation loan so you can pay off your credit cards, which then frees up your credit cards for use during the holidays? It may make sense, but don't fall into the credit card debt consolidation loan trap.
A debt consolidation loan is a great way to combine all of your debts into one monthly payment, and in many cases the interest rate on a debt consolidation loan will be lower than what you are paying on your individual credit cards. By consolidating, you may be able to lower your interest rate, reduce your monthly payments, and therefore pay off your debts faster. It's a great plan.
The trap, of course, is that now you have credit cards with nothing owing on them, so it's very tempting to use the credit cards. Don't fall into the trap of realizing that you can now spend $30,000 on your credit cards, because that will leave you with $60,000 in debt, which is much worse than when you started!
A better plan would be to get a debt consolidation loan for just slightly more than you owe. For example, if you owe $30,000 on your credit cards, and you plan to spend $4,000 this Christmas on gifts, travel, and food, get a debt consolidation loan for $35,000. This gives you enough to repay your debts, pay for Christmas, and leaves you with a cushion for unforeseen expenses.
Then, and here's the trick, don't use your credit cards this Christmas! Put them away and don't touch them, so you don't get into any more debt!
By planning your spending now, a debt consolidation loan can be the perfect way to ensure a happy and financially healthy holiday season.
Related Tags: debt consolidation, debt consolidation loan, debt consolidation loan christmas
Bernard Johnson has many years experience advising people on debt consolidation loans. Visit http://www.debt-consolidation-loans-information.com/DebtConsolidate.html for a free debt consolidation loan calculator, and visit http://www.debt-consolidation-loans-information.com for information about debt consolidation loans.
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