As debt consolidation mistakes go, this is a big one. The point of a debt consolidation loan is to combine all of your debts into one manageable monthly payment, and reduce the interest rate you are paying. Unfortunately, many people make the mistake of not consolidating all of their debts.
If you have five credit cards, and you apply for a credit card debt consolidation loan, make sure you consolidate all of your credit cards! There is little point in consolidating two or three of them, only to be stuck paying high interest rate on the remaining cards!
This is a common mistake, because people assume that keeping a balance on one card is good. It isn’t. Paying a high rate of interest, if you can pay a lower rate, is never a good idea. If you consolidate your credit cards, consolidate them all, and then stop using them.
In our next article we will talk about the final big debt consolidation mistake (and if you read the previous sentence you will know what it is).
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