Q:

Is consolidating credit card debt a good idea?

A:

Quick Answer

Consolidating credit card debt may simplify or lower monthly payments, but its usefulness depends on the situation, states the Consumer Financial Protection Bureau. Consider contacting individual creditors to discuss the modification of payment terms before signing a contract with a debt consolidation company.

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Full Answer

Before agreeing to any consolidation plan, read the details carefully, as they may involve increased costs, extra fees and high interest rates, recommends the Consumer Financial Protection Bureau. Also, consult a nonprofit credit counselor to explore alternatives before signing a contract. The U.S. Department of Justice provides a list of approved credit counseling agencies on its website.

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