Credit Consolidation-What You Should Know

Credit Consolidation-The Myth

Most people for whatever the reason, believe that credit consolidation is some type of wonderful 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 .

Unfortunately, there is an entire industry that wants us all to believe just that. I pretty much believe that by now, most of you know exactly what I am talking about. It seems that every companies advertisements lead us to think this way. These so-called experts want you to believe that this process is extremely quick, easy, and a no-brainer decision to make so-long as you join up with them and do exactly as they tell you to do. The self proclaimed leading authorities would have you think that as long as you sign up with them, this is a quick and easy process.

Credit consolidation services 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).

Before we go any further and declare our finances under control,let's look at a few things we definitely want to avoid.

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

No matter who you choose with your credit consolidation needs, it always 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. Your initial thought probably is, what's wrong with that. Well here's the problem with this for you that they don't want you to know. 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 than 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 than your original debt. Not a comforting thought is it.

In case your 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.