The purpose of debt consolidation services is to take all of your unsecured debt (which is usually credit card debt) and consolidate it into one loan that you make monthly payments on. The idea is that with one loan and in most cases one lower payment you can gradually become debt free. They will most likely convert your unsecured debt into secured debt by having you put your home as the collateral on the loan. Debt consolidation services seem to be a way out when an avalanche of credit card debt buries you. But are they worth it? You might be amused when you see their ads and they say they are nonprofit. But think about it. They have to make their money somewhere or else they cannot stay in business. Don't believe that nonprofit claim for a minute.

In fact you should carefully consider if you even want to waste money you don't have on a debt consolidation service. There are numerous reports that these agencies are under litigation for suspicious practices. Some have even been reported as taking the first month's fees you pay to them and applying it to their own administrative fee resulting in the payments not getting paid for the first month to the creditors.

From one point of view, credit card companies are glad to get something from you in terms of repayment of your credit card debt through a debt consolidation agency. But don't think that any of them are looking out for your best interests. They just want to make money. Stop and analyze why you are here in the first place. You have to seek out debt consolidation because of poor money management. But in reality you are only making the problem worse because you are spending what money you don't really have on a third party who claims to be helping you. They are not helping you. If they were helping you, then the cost to you would be totally free.

Understand this: If you are only 30 days behind on a credit card payment, it is not time to seek any outside help. Even if you attempt to pay something to the credit card company it is better than nothing. Save what little money you have to directly paying your debt. If the credit card company is relentlessly phoning you then turn off the ringer and pay what you can. You can go online and pay and never have to speak with a person. Remember, this is unsecured debt.

When there are so many debt consolidation agencies with bad reputations, it is wise to avoid debt consolidation like a minefield. Take some time and do some research on the companies. Remember that the Better Business Bureau really does not provide enough conclusive information on a company to allow you to make a decision. They only provide a record of the number of complaints. Some of these companies change their names all the time and it is hard to track them.

Hold on to your hard earned money and use it directly to fixing your debt problems. Remember there is no quick way out of debt no matter what these consolidation companies claim. Throwing away your money on them is just not worth it.