Ask Terry Questions Credit card debt consolidation

Credit card debt consolidation

By Terry Savage on May 31, 2018 | Credit/Debt

Hi Terry,
What is the best program for credit card debt consolidation?
Thanks, Jamie

Terry Says

Most “debt consolidation” programs are a ripoff and a hazard to your future ability to get credit.  That’s because they typically advise you to stop paying your bills, build up a “fund” with them, so they can negotiate a “deal” to settle your total debt for a smaller amount.  Of course, they take big fees for doing this.  In the meantime, your unpaid bills destroy any credit you have and may even result in garnishment of your wages.

Instead, I suggest you call the National Foundation for Credit Counseling at 800-388-2227.  That will connect you to the nearest local office.  They will give you advice you can trust about paying down your debt.  That doesn’t go on your credit report.  But if you are truly “buried” in debt, they will help you set up a repayment plan with your creditors. You send one agreed upon monthly amount to them, and they parcel it out to your creditors, who agree to lower interest rates, and perhaps wipe out some late fees.  If you enter this type of plan, it will go on your credit report.

And worst case scenario, which typically happens in case of divorce or huge medical bills, they will refer you to a bankruptcy attorney.  But you can trust their advice.  So don’t fall for those late-night debt consolidation commercials!



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