Debt Consolidation Articles

By [http://ezinearticles.com/?expert=Neil_Goldberg]Neil Goldberg

Several weeks ago, several of my colleagues and I were at a local community college in their student center assisting students who had issues with their credit report or who needed help because they were overextended with credit card debt. Ironically, at the very next table were representatives from a local bank trying to sign up students for a credit card. The hypocrisy of the situation really struck a nerve. Here we were trying to educate these students on financial matters and aid them in their efforts to extricate themselves from their burdensome debt and right next to us were these vultures encouraging students to sign up for a high interest credit card.

Having been in the debt consolidation/debt settlement business for over 10 years, first as a certified counselor and later as an administrator, and being the father of a recent college graduate, I have heard a litany of horror stories from college students and recent graduates regarding the large amounts of debt they have accumulated at such a tender age and how they now felt trapped, overwhelmed and ill equipped to handle the matter.

Unfortunately, parents and educators are to a great degree responsible for this situation, as sound financial habits need to be instilled in children at a young age and constantly reinforced throughout their formative years in school and at home. Sadly, there is a dearth of financial education in the schools and for the most part the topic is not discussed at home. We need to teach our children the fundamentals of saving, budgeting and most of all, restraint. Youngsters of today are different from the days of my youth. We were taught that you only bought things when you could afford them. Today, with credit so readily available, that credo of old has fallen by the wayside.

The youth of today want instant gratification and have no compunctions of charging it on the credit card and then just paying the minimum monthly payment when the bill comes. If you doubt this penchant for buying, one needs to look no further than the recent hysteria and buying frenzy caused by Apple�s new IPhone, which sells for $500-$600, which is more than a week�s salary for many! Unfortunately, with the high interest rates these cards carry, it will take the naive buyer years to pay off these purchases and the item can end up costing twice what the original purchase price was. For many students this is a cruel and hard lesson to learn, and one that will haunt them for many years to come, not only with unending credit card payments, but with issues securing new credit for cars, unsecured loans and mortgages due to being overextended; or if approved, paying exorbitant interest rates due to having a high debt-to-income ratio and therefore considered a high risk borrower. This situation is further exacerbated because students and recent graduates typically have limited incomes, so they do not have the wherewithal to pay their way out of this problem.

One of the best ways to tackle this issue is to try to nip it in the bud. Young people need to formulate a strict, realistic budget, and then, most importantly, stick to it. This means starting to say NO instead of rushing out to buy the newest electronics gadget that has just hit the stores. However, this requires a lot of self-discipline, something many young people of today lack. It�s no shame therefore in asking for help, and an excellent solution for many may be credit counseling or debt consolidation. In this program they will be taught the basics of budgeting, be supplied with on-going financial literacy materials throughout the course of the program, and probably best of all, most or all of their credit card interest rates will be lowered to a much more manageable rate, which will allow them to pay down their debt much more quickly while saving hundreds or even thousands in interest costs in the process.

If you fit into this category or you know someone who does, why not suggest they explore this option? It may not be for everyone, but for many it can save years of heartache and angst and help pave the way to a sound financial future. [http://www.godebtfree.com]The Credit Counseling Foundation, Inc provides [http://www.godebtfree.com/education/index.htm]web-based education and personalized consumer credit counseling to clients and the general public in an effort to help consumers use credit wisely. Visit us at [http://www.godebtfree.com]www.godebtfree.com