Credit card companies, banks and other lenders all make their money on the interest they charge you for borrowing money from them.

Obviously we can never predict in life when something is going to go pear shaped, we may lose our job for one reason or another, we may have ill health and be unable to work, we may have other financial commitments and find that the money we have doesn't seem to stretch very far. This is unfortunate but quite often things can be resolved quite soon with the least upset.

People on lower incomes or poorer credit ratings are generally offered higher interest rates, and this is where many people come unstuck. Each month you have to make a payment, and quite often people on low incomes will pay just the minimum balance from their credit card statement, now this seems great for a while, until one day you realise that all you seem to be paying is interest! Your balance is just not going down! So what do you do? Well some people starting weaving a very tangled web by transferring their balance to another card with a great introductory offer (if they are in the lucky position to be accepted for another card).

Again this seems fine for a while until the introductory offer expires and you have to pay full whack interest!

Meeting the monthly demands becomes quite difficult, and in the end people are borrowing from one lender to pay another.

This is where debt consolidation comes in. Basically, a lender will pay off all of your debts, and then you will pay just one bill, to them, they claim that they could even reduce some of your debt. Research is the best tool here, before you go off and sign up with any old debt management company, read all of the terms and conditions and make sure you are aware of what is going on. Approached correctly debt management could avoid getting to the nasty stage of Bankruptcy!