Debt Consolidation - good, bad or indifferent? ADVICE NEEDED!!!

True debt consolidation is merely taking out one loan to pay off all the other loans, so you only have one payment. Usually people will do this by taking a home equity line of credit. That normally has a lower interest rate while creating a tax deduction. If you are looking to do debt counseling, that's a bit different. I did it 10 years or so ago I think... It helped me out tremendously. Unfortunately, what I found out later is that most of my creditors would have worked with me if I had called them. I would have gotten the same deal as I did through the credit service, without the $50/month fee. I have since bought a house, and 2 cars. I have credit cards again too. The only thing that has changed is my attitude. My only debt is the house and 1 car. Although we charge everything on our one credit card, we pay it off at the end of the month. And we get 1% cash rebates on the card. It's like they pay us 1% to use the card - I like that idea! Whichever way you go, unless you STOP using the credit cards, you're going to end up right where you are now but most likely worse. I'm getting ready to start reading Dave Ramseys book - Total Money Makeover. I have heard WONDERFUL things about it and am really excited to see what tips he has.

dear dmillman... i also have debts and am trying very hard to pay them off... i have a home loan, car loan and personal loan... and with the interest rates keep on increasing, it is very hard for me to make extra repayment as all my and my hubby's salary is almost finish everytime we get our paychecks to pay for all of those debts... plus the bills, petrol and groceries prices that are also increasing... so i really really know how you feel... right now, me and my hubby can only pray to God and ask Him for His blessings to give us health... so that we can earn money together to pay off the debts... fortunately, it is getting much better now... i'll pray for you and best of luck...

My best advice is not to open any more accounts and take one account and pay it off. Then continue to pay them off one at a time and quit using them as you pay them off. Continuing to open new accounts is the game the credit card companies want you to play. Eventually, you want to have only one or two accounts. One for regular purchases that can be paid off fairly quickly and the other for emergencies. I don't trust debt consolidation services because I don't think they have full disclosure. Meaning that if you are not really careful, you might not get the servive you thought you would get.

I think it is better not to get too much credit card, consider deeply you will found it can not help you afford the debt