Credit Consolidation-The Basics

Credit Consolidation-The Myth

Many people are made to believe that credit consolidation is some type of really cool magic. That somehow, someone, by some miracle magical way, is going to make anyone's debt shrink to almost nothing just by signing up and entering into their program .

As much as I hate to admit it, there's entire industry that wants us to believe just that. I think most people by now, know exactly what I am talking about. It seems every company’s advertisements lead us to think this way. The companies who suggest that as long as you sign up with their group it's a rather quick and easy process and a no-brainer of a decision for you are simply not telling you the truth.

Credit consolidation services just do not work like that. If it where true, there would only be one company in the industry, and eventually they would no longer be needed because everyone would be living debt free simply by word of mouth and non-profit organizations. (A quick tidbit of info here, statistically, most scams from this industry come from companies using the term non-profit and Christian in their advertisements).

So before we pronounce ourselves debt free and on our way to financial salvation, let's take a look at the things you want to avoid

Credit Consolidation-The Do-All-Say-All Consolidators

Everything here in credit consolidation starts off the same way. They will explain how it all works, the benefits, the amount of your monthly payments, length of payments etc. They tell you to relax, just make sure your money is available once a month and they will handle everything, and before you know it you will be debt free You might be asking yourself, what's wrong with that Here is why I don't like this and I think you should be aware of. As long as your trusting them for everything (cause their being so good to you) for just a few more dollars a month that you could have afforded, you would have been out of debt so much quicker. Can you guess whose pockets got lined with that extra money. The moral of this little paragraph is, "this is not a spectator sport" so get off the sideline and get involved. Never let anyone do everything, cause it will cost you.

Credit consolidation-The Balance transfer Game

A little disclaimer here to start with. When it comes to credit consolidation, I don't have a problem with balance transferring per-say. Here is the problem I have with doing this. Most people will not read and understand all the fine print. Balance transfer cards are a dime a dozen these days and those great rates generally don't last to long. If your going to transfer a balance from a high interest rate card to a lower one for the intent of debt consolidation, make sure that rate will always be lower then the original rate.

Credit Consolidation-The easy Money Loan

I'm going to make this section short and sweet. Getting a credit consolidation loan is not as easy as some people want you to believe. Most people who are contemplating this method usually have some type of credit issue. A credit consolidation company (not a trusted company) will sell them on getting a loan from their source. By all appearances all will look good. Your monthly payments will be lower as promised, but with the interest rates your being charged, when you actually get done paying off the new loan you would have paid substantially more then your original debt. Not a comforting thought is it.

In case you’re wondering, when it comes to credit consolidation, there are good points to all ways mentioned above. It just depends on the company you choose and your willingness to get involved and not just stand on the sideline.

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