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Financial-Pep-Talk_No_BorderThe Financial PEP Talk podcast series from Pioneer Services is a quick, easy way to learn more about your finances. Choose from a variety of topics in audio and video format.




Debt is just a fact of American life, helping us to get the things we need and want. Having the right amount of debt can help improve both your lifestyle and credit score. But when families pile up too much debt, and especially families in the military, debt consolidation can be critical. The thing to remember is that not all debt consolidation methods — or debt consolidation loans — are created equal.


When you’re feeling overwhelmed by bills—especially from multiple credit cards—it may seem like a good idea to consolidate your debt by transferring the balance of a credit card with a high interest rate and APR over to another card with a lower rate. If it’s a brand-new credit card, there might be a very low rate that can lead to favorable monthly payments. However, all too often that rate is simply an introductory rate, which will reset to a much higher rate after a certain amount of time—or if you are late on just one payment!

Be sure to check the fine print of your credit card to make sure you know all of the fees and rules, and try not to just roll debt over from card to card to card. It’s far too easy to wind up using the “rollover” card and ring up even more debt!


military-bills A debt consolidation loan offers a smart way for military members to manage their debt. Military debt consolidation loans are available in a number of places. Before you sign on the dotted line, make sure that the lender has been in business for a while, understands the unique needs of military service members and their families and truly has your best financial interests at heart. Will they check your credit? Will they consider your ability to repay the debt? Even if your credit is less than perfect, there are options that can help you make ends meet and rebuild your credit score, as long as you make your payments on time and in full.

things to consider before you sign:

Avoid The Minimum Payment Trap

Using a credit card, even one with a low rate, is a dangerous way to consolidate debt. If you make just the minimum payment on a card with a $5,000 balance and a three percent interest rate, it will take more than seven years to pay it in full. A loan of the same amount, even with a much higher rate, will take only three to five years to pay in full, and the amount you pay each month will stay the same.

Balance Your Credit

Part of your credit score is based off the various types of credit you use. If you only use credit cards (even store-specific ones) your score will be negatively affected. Try to add a variety of credit types, but only when you need it.

Protect Yourself

Unlike other forms of credit, some debt consolidation loans for military provide a fixed interest rate and set monthly payments. This makes it easier for you to budget for loan payments and improve your credit scores. You’ll also know your exact pay-off date and the total payment before you agree to the terms of the consolidation loan.