There are some companies who legitimately want to help people with bad credit consolidate their debt. These companies usually charge a reasonable up-front fee, avoid making extravagant claims and will offer professional references upon request.

Then there is the “other” type of bad credit consolidation company. These types of companies will prey upon your fears and offer you hope that somewhere out there lies and easy solution to your problems. That bad news is, the latter type of bad credit debt consolidation companies is far more common than the former.

Debt Consolidation Companies: What Exactly Do They Do?

Basically, what a bad credit consolidation company does is that it acts as your mediator. They talk to your creditors and try to lower both your interest rates and monthly payments. Once they have reached an agreement with your creditors, they will let you know what your monthly total will be. Then you will send this monthly amount to the debt consolidation company and they will distribute the money to all your creditors.

Now in theory, that’s what they’re supposed to do. The companies that are running scams often keep much of that money you sent them and call it “administration fees” or ” loan origination fees”, even though no loan has been or originated. What this means to you is that your creditors will continue to harass you and report your account as delinquent and unpaid to the credit reporting agencies. The money that you sent to these companies never makes it to the creditors.

Does Legitimate Bad Credit Debt Consolidation Really Exist?

There are legitimate bad credit debt consolidation companies. The legitimate companies will not send you unsolicited e-mails or any kind of mail unsolicited. You also won’t find them advertising on late-night television. If your credit score is very poor, chances are you probably won’t qualify for unsecured loans throw a bank. However, you may be able to refinance your house or your car to pay off any unsecured debt. Best to talk to your bank or mortgage broker. Another good idea is to go see a legitimate financial planner. Let this professional assess your budget and then help you find ways to get out of debt and stay out of debt.

One other way to consolidate debt it is to transfer all your unsecured debt to one low interest credit card. This approach does have a few drawbacks though. If your credit really sucks, the credit card company may decide to hike up your interest rate without warning. If you happen to have more then just one credit card, you may have to either cut them up or put them away in a safe place to avoid the temptation of racking up new charges on them. Of course you should make the minimum monthly payments, more if you can afford it, to the card left with the balance of your debts.

Despite the fact that you have bad credit, debt consolidation is still possible. Just make sure that you’re working with a reputable company that truly does want to help you get out of debt.

Kerry Ng is a successful Webmaster and publisher of The Debt Info Blog. For more great helpful information about Debt Tips visit The Debt Info Blog

First, it is important to understand that you a olutely must have a plan for paying off your credit card debt. Worrying about it wont help you get out of debt any faster. You must put pen to paper and develop a plan for paying it off. The first step you must take in developing such a plan is by analyzing your existing budget to determine where you can use additional money to pay down the debt. Look at luxury cost areas that you can cut out and use those funds to pay on your credit card. Co ider optio like packing your lunch at home i tead of eating out, cutting down on the number of coffees you purchase each week, etc. Once you start thinking about it, you may be surprised at the amount of money you can come up with to put toward your credit card debt.

Second, it is extremely important to understand that you will never get out of debt by paying only the monthly minimum. At that rate, youll be lucky if you have it paid off by the time you retire. You must take aggre ive action and start at least doubling your payments in order to make a dent in your debt.

If you have more than one credit card, take a look at which cards have the highest interest rates. The card or cards with the highest interest rates should receive your first attention. In the event that you cant afford to pay more than the minimum amount on all of your cards, focus on the card(s) with the highest interest rate first. When those are paid off you can then take that money and a ly it to the other cards. Slowly, but surely you will pay them off.

It can also be helpful to look at the ways in which you can reduce the interest rates on your cards. One way to do this would be to simply call up your credit card companies and request a lower rate. Of course, they dont have to grant the lower rate to you but if you point out that youll take your busine elsewhere if they dont, they might quickly change their tune. Tra ferring balances to a lower interest rate card can also be helpful as long as you close the original account so you are not tempted to run it back up again.

By following these strategies and remaining dedicated to paying off your credit cards, youll have the debt eliminated before you know it. Just remember that while it may seem as though it is taking forever and you may be tempted to quit, following these strategies will help you eliminate your debt far sooner than just letting things go as they are.

Why Consolidate?

There are several great reasons to consolidate credit card debt. One of the best reasons is to get better rates. If you can get a better rate on a consolidation than you currently have, then there is no reason not to consolidate. Anytime you can consolidate credit card debt and save yourself money, you should. Locate all of your interest rates from each card and write them on a list. Then note the new rate you would be given. If the new rate is lower than the average of the old rate, then to consolidate credit card debt would be profitable for you. If there are cards that have a lower rate, then you don’t have to include them in your consolidation.

Another reason people love to consolidate credit card debt is to make their lives simple By paying one bill, they can cut out a lot of stress and bill paying time. You should probably not consolidate credit card debt for this reason alone however. You don’t want to pay more in the long run just to cut out a few pieces of mail monthly.

Consolidation also gives those in a credit card mess a chance to get out of it. By consolidating, they may be making lower monthly payments than they would be if they didn’t consolidate credit card debt. By closing out the other accounts, their credit may also be improved.

Who To Turn To?

When you want to consolidate credit card debt, you should turn to professionals. There are many great credit card companies and banks that would love to help you with your request. Make sure you do your research so that when you consolidate credit card debt, you are certain you are making a decision that is profitable to you. Make sure there are no hidden fees that come with different consolidation plans. Doing your research can help you save money for the future.

Making The Choice

If you want to consolidate credit card debt, you should first look at all of your debt in detail. Once you know what you have, it will be easier to contact professionals to help you with your consolidation. Don’t be afraid to tell them you are shopping for the best deal. You should do yourself the honor of getting the best deal out there to making your consolidation as worthwhile as possible.

by: Morgan Hamilton

Wanting to eliminate credit card debt is a good first step, but it takes much more than want to get it done. When you are serious about eliminating your credit card debt, you will find that a few simple steps will get you on the way to being debt-free.

Step One: Know How Much You Owe

Before you can even begin to eliminate your credit card debt, you need to know how much you really owe. So many people are so overwhelmed by the thought of their credit card debt that they don’t want to know how much they actually owe.

By avoiding the idea of how much you owe, who you owe and how much you are paying in interest, you are able to ignore the fact that you have a problem.

Start by getting a complete picture of how much you owe, how much you are paying in interest and fees and what your monthly payments are. Make a list of all of your debts, from highest interest rate charged to the lowest. List the account, contact info, balance owed, interest rate and monthly payment. This is your master debt list.

Now sit down and look at your monthly income and monthly spending. Chances are that you don’t have much extra money to devote to paying off your credit card debt. You’ll have to find the money to make the extra payments.

Step Two: Cutting Your Spending

You can’t just make a plan to pay off your credit card debt and not cut your spending. The reason you have debt is that you spend more than you have. No matter how much money you put towards paying off your debt, you will not be able to eliminate the debt if you don’t stop spending.

You simply have to stop using your cards. Put them in a safe deposit box or in a gallon of water in the freezer. Cut them up if necessary. The key is to not carry one with you. You can’t use them if you don’t have them.

Look at your spending very carefully. It is actually quite easy to find ways to trim your spending. If you shop around, you can cut many of your necessaries, such as your insurance premiums, your cell phone plan, your cable and internet services. You can find ways to cut your utilities and grocery bills. If you pay attention to your spending through a budget, you will be able to cut back considerably.

And remember, if you can’t pay with cash, you can’t buy it.

Step Three: Lower Your Rates

Take back out your debt master list and start taking steps to lower your credit card rates. The higher your interest rates, the longer it will take you to pay off your debt.

Start by calling each of your credit card companies and asking for lower rates. If you have consistently paid your bills on time, you shouldn’t have any problem getting a lower rate. If you haven’t, you may not get a lower rate. But it never hurts to ask.

If you can’t get the company to lower your rate, then you should start shopping around for a card with a lower rate and a balance transfer feature. Many cards offer low initial rates for balance transfers. You can use these to your advantage and pay off your debt in a faster manner. But once you transfer your balance, you should cancel your old card or cut up the card. You don’t want to continue to use it.

Step Four: Use the Snowball Method

The most money and time effective way of paying off your debt is the snowball method. Start by adding as much as you can to your highest interest debt and get it paid off quickly. During this time, pay at least the minimum payments on each of your remaining credit cards. When you have paid off the first card, put the amount you were paying on it towards the second card. As you go, you build momentum and are able to pay each card off faster and faster. You snowball your debt away.

Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

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