The promises are very alluring to anyone who is deeply in debt, with overwhelming consumer debt.  Of course, anyone in debt will believe anything to make all of their debt just disappear. But wait, before you start walking in the clouds and dreaming financial paradise is coming, watch out for the storm brewing.

Picking a Debt Consolidation Company is not an easy task, but a very complex move to hire the right company to accomplish a good outcome.

One problem is that if you are in a deep well of debt, the Debt Consolidation Company knows you're a credit risk; the consolidation company may entice you with promises of an Easy Loan, and then charge you higher interest rates than what you're paying currently. Those high interest rates could be as much as twenty-one to twenty-two percent. The monthly payment may be lower with a so-called E-Z Loan but you'll end up paying considerably more.

The reality is that Debt Consolidators have fees added into the monthly payment or fees you pay up front. It will cost you about ten percent on five hundred dollars (about fifty dollars).

Of course they will ask you to do automatic pay, directly from your checking account, whereby  the consolidator will receive 10-15 percent rebate from the creditor for this type of arrangement. Do a little homework on dealing with your debt, and research your options.

After an in-depth search and deciding which Debt Consolidation Company to hire, etc. Read the contract thoroughly including the fine print.

Make sure to read all disclosures before ever signing. If you buy an unseen horse and later discover it is dead, it's a dead horse - done deal. A word of advice, no matter what type of bank loan or consolidation loan, always negotiate a lower interest rate.

At this stage of the game you need every break you can make for yourself, and then stretch out a longer repayment schedule for yourself. Some will offer longer payment schedules but beware - thirty years is not in your best interest - interest being the point.

Transferring your balance to another credit card is like a bear trap. Remember that it is a trap in most cases because the low interest is only for a few months and then you'll be playing a card game every other month with a different credit card. The concern is that this will leave a credit transfer paper trail.


The activity begins to show in your credit report, which translates into you being a bad credit risk, which in turn causes Credit Card Companies to start turning down the transfers. Make a larger payment and you will notice the bigger payments will begin to have a significant impact on your indebtedness.