Consolidating debt to one credit card
A tip for Mom and Dad: If your kids ask you for a loan — for debt consolidation or any other purpose – even if you can easily afford the requested amount — take a good, hard look before you agree.If you do go for it, keep it as professional as possible.[Disclosure: Cards from our partners are reviewed below.] Debt consolidation is a type of debt refinancing that allows consumers to pay off other debts.In general, debt consolidation entails rolling several unsecured debts, such as credit card balances, personal loans or medical bills, into one single bill that’s paid off with a loan.And be sure to discuss the situation with a lender before your credit report is pulled.
However, the most common debts are credit card debt, medical debt, and student loans.
“The company will then use this money to attempt to negotiate with creditors to reduce the amount of principal you pay off.” If you’re considering this option, try to speak with a nonprofit credit counselor first because debt settlement can put your credit in jeopardy.
(You can learn more about choosing a credit counselor here.) If you don’t pay your debt, creditors could hire debt collection agencies, which could lead to a lawsuit, the CFPB says.
Not only will you be bailing out your children at an important time in their lives, but you’ll also be giving them an excellent borrowing experience.
In the days of yore, when people needed a hand catching up on their bills, they strolled into the neighborhood bank, spoke to branch manager, shook hands on a loan, and got a check for the amount they needed.
One of the easiest ways to consolidate your credit card debts is to call your current card issuers and ask for a better deal.