Debt Consolidation- Can It Really Help?

istock_000006007654xsmallToday’s economy has not only put a fear in a lot of people across the nation but is forcing some to take action when it comes to alleviating some of their debt.  Debt consolidation is being sought across the country as a popular means of relief and what some believe to be a much better way to go than the alternative of bankruptcy. Due to massive amounts of unsecured debt,  hard working people are having a hard time being able to afford even just the bare necessities when pay day comes and are turning to debt consolidation for a myriad of reasons.

The average household is at least $8000 in credit card debt, many people are in debt by more, and are finding it hard to pay the debt down due to high interest rates on their credit cards. They are finding they just enough money at the end of the month to pay the minimum balance on the cards and in doing so aren’t even making a dent in the full amount owed!  Unfortunately, today’s economy has forced many families to use credit cards to buy even the most menial of things, for example gas or groceries. Where credit cards were at one time usually used as a means to pay for big ticket items, now they are being used to pay for household bills and many other necessities due to costs of living going up but salaries staying about the same.

Instead of drowning even further in debt, debt consolidation has become a relief for many families and individuals with a high amount of unsecured debt. There are several ways to consolidate debt just as there are several reasons for people to want to do so. Some people opt to refinance their house in order to include the unsecured debt into one payment with their mortgage. By taking out another loan using their home as collateral, they are adding the balance owed from the credit card debt and rolling into one payment. The goal is to not only have one payment but to secure a lower interest rate by using the home instead of the higher rates that unsecured cards normally have.

There are also various types of consolidation loans which involve retaining a loan for the amount of all of the unsecured debt and again rolling then into one payment. The loan isn’t secured by any collateral so the rate may still be a little high but there is only one payment to make and usually that one payment is less money than the individual payments are on the cards themselves. The best thing to do, no matter how you decide to consolidate and by what means is to either discard of the cards or use them only in emergency. If not, the risk is always there that the card balances can be brought up once again and then you’re back to square one.

Debt consolidation is available from various sources and has helped a great many of families to be able to breathe a little easier come the next billing cycle. It can easily become an alternative to bankruptcy if implemented with the right tools and committed to. It’s an individual choice, it is a common one and nothing to be ashamed of. Debt consolidation has been put in place to help out until you’re able to get back on your feet! And we all fall down sometimes.


  1. That seems a little one sided. What article was your primary source of information?

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