Can You Continue Charging To Your Card After Credit Consolidation?

Credit consolidation offers a respite from the constant nagging calls from creditors and their collectors when you are falling behind on your payments. This help often comes in the form of a restructuring of your credit account that has you pay less on a monthly basis in exchange for a longer payment term.

A common question for individuals who are interested in credit consolidation services is whether or not they can continue using their credit cards after the services take effect. For many people, the idea of being unable to pay with credit is a very difficult adjustment—especially after spending with the card so liberally, often on a daily basis. You can find more information here –

The Problem with Charging While Repaying

If you are having trouble managing your credit card debt, continuing to charge to your credit account will only make the problem worse, even if you are already enjoying a restructured credit account with a credit consolidation service. Generally, while it is possible to continue charging for as long as you keep your debts under the credit limit asserted by your creditor, it is not recommended to do so.

Credit Closing Agreements

Some credit consolidation companies will obligate you to close your credit card accounts and not open any new ones until you are debt-free. This is done is order to make sure that you do not compound your already complicated debt with new debts that will endanger your ability to pay off the old ones.

This makes sense, but leaves little room for emergency situations. In some cases, you are allowed to keep a single open credit line to be used for emergency purposes. This is often a general purpose account, with a low balance or no balance that can be used anywhere, but that you will have to assume the responsibility of paying for, just like with your other debts.

With credit consolidation companies that do not obligate you to close your open accounts, you can enjoy the ability to continue charging, but you are not at all recommended to do so. The practical upshot of not charging to your open credit accounts is that your credit score will go up while you gradually pay off your debts.

If you decide that you need to charge to your credit account while a credit consolidation company is helping your resolve your existing debts, you run the risk of losing their support by not honoring your side of the debt restructuring agreement.

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