Consolidating e

If you are falling behind paying off your credit card debt, it’s very likely your credit score is tumbling, too.

If the interest rate you get for a debt consolidation loan is not lower than the average interest rate you already were paying on your credit cards (see above), then a debt consolidation loan does you no good.

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Debt consolidation is especially effective on high-interest debt such as credit cards.

It should reduce your monthly payment by lowering the interest rate on your bills, making it easier to pay off the debt.

Instead, the nonprofit credit counseling agencies work with card companies to reduce the interest rate and lower the monthly payment to an affordable level for the consumer.

The consumer sends a monthly payment to the credit counseling agency, which then distributes the money to each creditor in an agreed upon amount.

The first step toward making debt consolidation work is calculating the total amount you pay for credit cards every month and the average interest paid on those cards.

That provides a baseline number for comparison purposes. For many people, there is enough left to handle their debt if they organize their budget better and get motivated to pay down debt.

Add the bills and determine how much you can afford to pay each month on them.

Your goal should be to eliminate debt in a 3-to-5 year window.

If you are tired of seeing your credit card balance rise every month …

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