Pros and cons about consolidating credit cards
In some circumstances, a consolidation loan might result in a lower total monthly payment or a lower average interest rate on your debt.
The rate you get depends on your credit history and income.
(For related reading, see "Negotiating a Debt Settlement.") Settled debt is gone – wiped clean.
However, with unsecured debts such as credit cards, you risk having your account closed completely after the settlement is complete because the lender will not want to continue to grant you credit.
Advanced debt collection techniques and accounts receivable processes can be expensive, and fighting through a bankruptcy proceeding is unattractive to most lenders.
The process is not usually completed after one round of communication; in fact, stretching out the debt settlement process is a common strategy to force a creditor's hand.