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How Do You Consolidate Debt?

Debt consolidation is a form of debt reduction that is frequently recommended to anyone struggling with consumer debt or carrying high balances on their credit cards. While consolidating debt may be helpful, it's possible to actually end up deeper in debt if you choose the wrong debt reduction services or program.

So how do you consolidate debt effectively? At American Consumer Credit Counseling (ACCC), we have some answers. As a non-profit organization providing solutions for getting out of debt to individuals and families, we offer these answers to frequently-asked questions about debt consolidation:

What is debt consolidation?

Debt consolidation combines all your unsecured debt into a single sum. This makes it easier to keep up with payments, as you only make a single payment each month instead of many payments to creditors. Additionally, when consolidating debt you may be able to secure lower interest rates, enabling you to pay off your debts more quickly.

How do you consolidate debt on credit cards?

Consolidating debt on credit cards works the same way – all the money you owe is consolidated into a new total. You may receive frequent offers in the mail from credit card companies offering to consolidate your balances on other cards. The trouble is that there may be significant fees involved, which can actually increase the amount you owe.

How do you consolidate debt without getting deeper in debt?

The key is to find a debt consolidation agency that charges minimal fees. There are many companies who will offer to help you consolidate debt because there's a lot of profit to be made in debt consolidation. Some will charge large amounts for their services or include hidden fees. Others may consolidate your debt by offering you a loan. But if you're in financial trouble, interest rates on that loan are likely to be high and consolidating your debts may actually drive you deeper into debt.

How do you consolidate debt with a reputable agency?

Look for agencies that have been in business for a long time, that are non-profits dedicated to helping consumers, and that are members of a national accreditation association.

How do you consolidate debt at ACCC?

At ACCC, we offer a smart alternative to traditional debt consolidation solutions. It's called a debt management program and it allows you to consolidate debt without taking out a new loan. It's very affordable – because we're a non-profit organization we're able to offer the lowest fee structure in the industry.

How do I get out of debt with ACCC's debt management program?

When you enroll in our debt management program, we'll consolidate all your unsecured debt, which may include money you owe on credit cards, department store cards and personal loans. You'll make one payment each month to us, and we'll make payments to your creditors. We'll also work with your creditors for possible reductions in interest rates, late fees and over-limit charges, so your monthly payment on your consolidated debt may be less than you were paying before.

Where can I learn more?

Contact one of our professionally trained debt counselors to learn more about how you can consolidate debt most effectively, or to enroll in a debt management program. For more information, we offer a broad range of educational resources on our website, where you can learn about tips for getting rid of debt, creating a budget, managing money effectively as well as answers to questions like "What is credit card debt relief?" and "How do you consolidate debt?"

American Consumer Credit Counseling (ACCC) is one of the top nonprofit debt consolidation companies in the U.S., with more than 22 years' experience helping individuals and families consolidate credit card debt and improve their credit management skills. If you're wondering "How does debt consolidation work?" and "How can I consolidate my bills?", we can provide you with debt consolidation information to show you exactly how we can help you consolidate debt without having to borrow money or pay steep fees. If you're considering bankruptcy, we are also one of the approved credit counseling agencies for issuing a pre-bankruptcy certificate as well as providing the post-bankruptcy credit counseling course.

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