Define consolidating credit card debt

Debt consolidation is nothing more than a con because you think you're starting with a clean slate.

But the truth is the debt is still there, as are the habits that caused it—you just moved it!

Consolidation is not right for everyone, make a decision that's right for you. Your payments will remain the same until all the creditors are paid off. You must keep up with your monthly statements and forward them to the consolidation agency. You can't use your credit card until you're done with the debt management plan. A debt management plan is not bankruptcy, but it will appear negatively on your credit report. Here's what you need to know about consolidating accounts through a debt management plan with an agency. Instead, they have preset arrangements with most financial institutions, many of which lower interest rates and fees, so more of your payment goes toward the balance rather than finance charges. With something as precious as your finances, be exceedingly careful about who you work with.

Their debt management plans can help you get back on track -- but they can also be unnecessary and even detrimental when done through a poorly run organization or for the wrong reasons. These agencies do not make loans, nor do they settle debts.

Add in mortgage payments and student loans – plus a cost of living that's outpacing income growth – and it's no wonder that the average American is looking for credit card debt relief.

Often, credit card debt is spread across several different cards, leading to multiple statements and payments.

If you can't afford the payments, your home could be foreclosed.

Personal loans and credit card balance transfers are two ways that consumers can consolidate credit card debt. An unsecured loan is not supported by an asset such as a house or car.

Banks issue personal loans for many purposes – including paying off debts. Instead, the lender considers the borrower's credit history and ability to repay the loan when evaluating the application.

If you have enough cash left over after subtracting expenses from income, consolidation will be presented along with other options. How do you know if a debt management plan will work in your favor?

When a counselor is knowledgeable and compassionate, these sessions can be enlightening and motivating. If he or she acts bored, judgmental or pushy, request a different counselor. First, the bulk of your balances should be in unsecured debts, such as credit and charge cards, personal loans and, sometimes, collection accounts.

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Instead, your debts remain separate, but your payment is consolidated.

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