Each and every bank issues credit card by clarifying certain criterions with the account holder who has applied for a credit card. The card is solely meant for spending money on various purchases. The credit card allows the card holder to spend a huge amount of money that is not valid in case of debit card. Also the credit card comes with the benefit of spending more than what is present in the bank account that is attached with the respective credit card. The extra amount is pay from the bank and later the account holder pays the out- standing amount to the bank. Unless the account holder pays back the extra amount, the account holder is said to be in debt.
Cibil score matters a lot when a person applies for a loan from the bank. The cibil score is actually a report that is generated by a bank and it contains the transactions that the account holder or the applicant has made in the past. It contains all the previous loans and debts, include credit card debts, the payback mode and time and the due payments as well. If the cibil score of an applicant is good then the bank issues loan to the applicant. But in case the cibil report is not good and has some due payments then the bank rejects the loan application. Also in case of credit card application the same thing applies. Hence, in order to get loans as per required one must keep the cibil score up by making payments and pay debits on time.
When a person ends up using the credit card for more than the limited amount he or she becomes a debtor and the bank becomes the creditor. In case the account holder fails to pay the out- standing amount within the given time period, the bank takes further steps and drags the case underjudicial platform. Once taken under law and order, the account holder can be subjected to stiff punishment like huge fines and imprisonment. In order to avoid this situation, people might take a way out. There are various firms that provide credit card consolidation loans on very low interest rates. It means that a debtor can take up the required credit card debt amount in a form of loan from the consolidation firm and settle the out- standing amount with the bank so that there are no legal matter left. Then the debtor can keep paying the monthly installments to the consolidation firm and settle the loan in the given time period.
Taking up a new loan in order to settle the previous ones is a good option as using this method one gets rid of numerous creditors and then is left with just one creditor. These firms sanctions loans on a very low interest rates and with extended time period as well, making it easier for the borrower to pay back the borrowed amount to the credit card debt consolidation firms.