Don’t Change Debt Consolidation into Your Next Credit Problem

Debt consolidation is the process of combining all of your high interest rates into monthly payments with a single and lower interest rate. This has been used by many debtors to plan debt relief. Generally, debt consolidation will be accompanied by debt consolidation loans. A debt consolidation loan will be used to pay off all your high interest debt and you only need to focus on a single monthly payment to clear the debt consolidation loan. Therefore debt consolidation with a debt consolidation loan will help make your debt more manageable to achieve your debt reduction goals.
After paying off your debt with a debt consolidation loan, your credit card balance will be zero and now you have a maximum credit limit for use. The dangerous part is that if you don’t control the use of your credit card and continue to use it to pay for your purchases and are used to paying minimum payments on your credit card balance, you will be stuck in another debt problem sooner or later.

You work hard to go through the debt consolidation process and manage to get a debt consolidation loan to write off all debt, don’t let yourself fall back into hot water and fight to get rid of debt again. The things you can do to avoid it are:

1. Change Your Spending Behavior

If you tend to buy things spontaneously, you are an impulsive buyer. Impulsive buying behavior can cause you to spend your budget. Therefore, you change spending behavior a lot to avoid new debt being added to you, otherwise your efforts to consolidate your debt and plan to be debt free will be in vain because new debt will swell to serious debt problems if you do not control it and You will soon be trapped in another financial crisis. To avoid impulsive purchases, you must plan your shopping list and only purchase items on the list.

2. Create a Budget Plan

Budget plans are important in financial management, allowing you to control your money, know where your money will go and how much you will spend on each expenditure. You put a lot of your debt consolidation loan payments in your budget plan so that you have a budget allocated for repayment loans. If you project expenses in your budget plan beyond the allocated budget, you must cut all optional expenses such as entertainment, luxury vacations or lower your lifestyle ranking, for example if you use to buy branded clothes and shoes, now you can go for more options inexpensive so you control your expenses within your budget.

3. Avoid Swiping Your Credit Card

Paying with electronic money like a credit card is easy and convenient. And because of this excess, this can cause you to spend excessive money and not realize it until you receive a credit card statement. Therefore, avoid using your credit card again. Cancel most of your credit cards, can you make a wise decision. You can leave one or two credit cards for emergencies.

4. Make Full Payments on Credit Card Balances

If you can’t stop using your credit card, but you think that you can control swiping it just to buy items in your budget package. Then, you must commit yourself to paying the full payment on your credit card balance every month. By paying in full on your credit card balance, you save yourself in new debt added to your account.

In short

Debt consolidation is a debt solution that can get you out of debt, on the contrary it can get you caught up in a second debt problem. Therefore, you need to accompany debt consolidation with proper money management to ensure your debt problems are resolved.