Bill consolidation is a technique that has been used by many consumers in the past, is currently being used by many consumers and is very likely to be used for a long time in the future by even more consumers. It is the act of taking all of your current bill payments and turning them into one larger bill payment for various reasons, both personal and financial. The procedure itself as well as what it actually is are both concepts that are not difficult to grasp for the average person. What might be more difficult is understanding the good points and the bad points of bill consolidation and with the help of this article and your own further research; you should soon be very cognizant of the various advantages and disadvantages of bill consolidation.
The Good Points
Easier Tracking: In terms of a budget, it is always a lot easier to track things if there are fewer things to track. Bill consolidation makes things easier for the average consumer in the same way that credit card statements make things easier for the average consumer. They both offer a simplified way of doing things. In the case of the latter it is printed monetary information and in the case of the former it is the fact that you only have to note one monthly bill in your budget.
Lower Interest Rates: Bill consolidation is often accomplished through the taking out of some kind of loan in order to zero out all of the consumer’s other accounts. This loan, especially if the consumer originally had a lot of credit card debt, is likely to have an interest rate that is much lower than the one they were previously dealing with.
Lower Fees: This follows somewhat from the lower interest rates discussion; traditional loans tend to have lower interest rates and fees than unsecured credit cards and depending on the method of bill consolidation used, a person might be able to get both a lower interest rate and lower fees as well.
The Bad Points
Confusion: With all of the information currently available about bill consolidation, some pretty large myths about it have built up. Because some myths are so well grained into the public consciousness, it can sometimes be difficult to a person to differentiate truth from fiction. This can make things very confusing, almost to the point where a person can start doing research on bill consolidation, only to be lost a few hours later.
Pressure: Bill consolidators can sometimes use high pressure sales techniques in order to push their services onto reluctant clients. If you are the kind of person that detests being put on the spot, then a bill consolidation negotiation could initially be a very unpleasant experience for you. Two of the best ways to deal with this are to either a) find a different company that makes things easier on you or b) go in there completely prepared and with a wealth of knowledge. Doing either one of these things will make the whole process much easier on you.