Debt Consolidation, Good or Evil?

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Q. Debt Consolidation, Good or Evil? Nobody is ever alone. Thousands are caught in the debt trap each year. Many approach debt consolidation companies, but such companies should be handled with care. Statistics show that the average American currently has thousands of dollars of unsecured debt. Credit cards and loans are abundant, losses with few or no assets to show for it are frequent. To read the full text of this article, go to: http://www.contactomagazine.com/debtconsolidation0606.htm

A. Debt consolidation is a tool. It is neither good nor evil. It is just like a hammer or a screwdriver--they can be used for good purposes, or used to do evil. When it comes to debt consolidation, it is usually a bad idea. The reason people get in trouble is from bad spending habits. Debt consolidation is a quick fix type of solution that uses up their options but does not force a change of behavior. In many cases, people continue to spend like crazy repeating the same old bad habits. They then end up right back in debt problems, except this time, they don't have any options, and they have the burden of the extra debt consolidation payments. So, while mathematically debt consolidation makes sense, at the behavior level, it is most often a financial disaster. Avoid it when possible.

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