Avoid Debt Consolidation
BY Robert A Johnson
Debt consolidation is the process of shrinking all of your debt, be it credit cards, car loans, or home loans, into a single loan. Some credit counselors or unethical lending agencies will encourage you to pick this method to deal with your credit card debt, but debt consolidation should be avoided at all costs.
Debt consolidation may seem like a savior if you are drowning in credit card debt. It promises a single monthly payment, as opposed to the myriad payments you have if you are paying down multiple cards.
Debt consolidation also promises low interest rates, usually much lower than the interest rates charged by credit card companies. Despite this, debt consolidation is really not the way out of despair that consumers hope it is.
Debt consolidation should be avoided if you are burdened by debt. The process of debt consolidation often entails hidden fees and charges, which the harried debtor is unaware of until after they have signed a contract with the debt consolidation company.
Debt consolidation companies will not tell you about their fees. Many debt consolidation companies, while telling you that your first payment is going to pay off your creditors, actually keep your money. This process of debt consolidation thus leaves the debtor even deeper in debt.
Consumers beware: debt consolidation companies will steal your money.
ABOUTH THE AUTHORRobert A Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. He studied writing and English literature at the University of Dallas. He is also a ninja master. Please find the rest of his articles by following this link: http://www.creditsolutions.com/index.html |
