A: The proper way to use your credit card is as a cash substitute. If you only make minimum payments, you'll end up spending more to pay the debts due to the interest rate. Only charge what you can afford. In other words, don't make purchases if you don't have the available cash in your bank account to make the purchase.

A: An unsecured debt is an account or monies owed that does not have a tangible property or product attached to it. (A home or car is a secured loan.)

A: A debt can be reported only for seven years after the date of last activity.

A: In many cases, borrowing money to repay borrowed money is financial suicide. If you qualify an unsecured loan to pay off an unsecured debt, essentially you are borrowing from one creditor to pay another.

A: It depends on a few factors. For example, if you have a great deal of equity on your home and you qualify for a lower mortgage rate, bundling the value of your home with your credit card debt could work to your financial advantage. However, if you are taking out a secured loan (example: home equity or second mortgage), you are attaching your current unsecured debt to something of value. The median interest rate in consolidation is 6 to 8 percent. Usually, that is less than most loans today.

A: No, as long as you are current with all of your bills and have a good credit rating, the policies of the creditors will remain the same. As long as you make your monthly payments on time, the payments are considered on time. Additionally, if you have a poor debt to income ratio, debt consolidation can pay off your debts quickly and enhance your credit rating

A: No, in fact it is the total opposite. Bankruptcy occurs when you do not pay your
bills and you destroy your credit for a period of time. During debt consolidation, debts are paid, and bills are satisfied.

A: Debt consolidation may improve a credit rating by showing a positive payment history.

A Yes, the FDCPA authorizes a collector to add interest if the original agreement defines the addition of interest during collection proceedings or the addition of such interest is under the jurisdiction of the state law.

A: Yes, if you are having trouble paying your bills, prioritize your debts into categories of essential and nonessential debts. An essential debt is one that can affect the safety of your life. Rent, mortgage, utility bills, child support. car payments, other secured loans and unpaid taxes are considered essential bills.