Debt consolidation is a simple matter of taking all accounts, regardless of interest rate, and merging them into one lower monthly payment. Quite often the interest rate alone is what makes it nearly impossible to pay off credit cards. These lower payments are easier to handle and help clear up existing debt more quickly.
However, it does not end there. It is important to get a handle on spending habits. In doing, a family can enjoy an improved credit rating without falling back into the same habits that got them into trouble in the first place.
It should also be noted that there are good and reputable debt consolidation services and those that are not so reputable. The Federal Trade Commission offers a list of safeguards to look out for when searching for a company that offers debt help. Be wary of companies that:
- charge high up-front or monthly fees for enrolling in credit counseling or a DMP (Debt Management Program).
- pressure you to make “voluntary contributions,” another name for fees.
- won’t send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances.
- try to enroll you in a DMP without spending time reviewing your financial situation.
- offer to enroll you in a DMP without teaching you budgeting and money management skills.
- demand that you make payments into a DMP before your creditors have accepted you into the program.
Due diligence is very important when searching for the right company. Clear Debt Solution has an excellent record and is listed with several agencies, including TASC, that serve as watch dogs for business in general and the debt negotiation industry.
