The average credit card debt in America is $4000. Twenty five percent of Americans have at least one credit card and no wonder that they want to pay off their debt easily. The answer for their wish is a non profit debt consolidation company.

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What does this Company Do?

A non profit debt consolidation company talks with each creditor to reduce the interest rates and monthly payments of several credit cards of Americans and with substantial balances and high interest rates. The consolidation company totals the monthly bills so that the consumer has to issue a single check to the non profit debt consolidation company. The company then distributes the payments to different creditors.

What Else is done?

A good non profit debt consolidation company offers financial counseling and help in budgeting to help the consumer not to fall in to debt again.

Are there any problems?

There are good companies as well as bad companies. The good ones help you get rid of the debt.

The bad ones eat upon your monthly payments and grow rich. Your creditors do not see any money or receive far less money then the agreed upon amount. Angry creditors will then, harass you with phone calls, negative reports to credit agencies etc.

Difference between Good and Bad company

The Federal Trade Commission web site gives excellent information about the wolves and the lambs. Be careful about any company using high pressure sales techniques or charges exorbitant “upfront” fees or donations.

All cannot get debt consolidation. Before offering debt consolidation plan, it should give you credit counseling to get a full picture of your income, spending habits, financial strengths and weaknesses. If a company offers debt consolidation automatically it is suspect. Enquire if they keep a percentage of your monthly payment and what that percentage is for. Normally your monthly payment should go to your creditor.

Don’t be taken in by the advertisement by a non profit organization. It may be dishonest. Such illegitimate ones charge heavy “donations” to offer their services. By joining these companies your credit ration will be spoiled and also your peace of mind. Ensure by research that your company has your best interests at heart.