Do credit card consolidation programs really help & how do they work ?
In UK, TYPICALLY your unsecured credit card debt is converted into a charge on your house (’second mortgage’) at less than the Credit Card rates but much higher than ‘normal’ Mortgage rates. Further, a multi-thousand ££££ fee is often added to the new ‘loan’ to cover the charges of the ‘adviser’ (hence they can boast ‘no up front fees’)….
This usually ends up costing you your house as the credit debt is ‘cleared’ so there is nothing to stop you carry on borrowing and running up even more debt you can’t afford …
Other arrangements (DRO’s, IVA’s) usually involve some degree of ‘default’ (so your Credit Rating is trashed) but are better than Bankruptcy and will allow you to pay it off at a rate you can afford without allowing you to borrow much more (or at least not very easily).
