Spending more money than you make has become the American way. Interest rates are lower than they’ve been in decades, tempting some consumers to borrow more to ease current credit anguish.

Debt consolidation companies often prey on those who are scared of debt. The objective should be to consolidate various higher-interest balances into one manageable and less-costly package.

Beware: sometimes consolidation increases total payments. Quick fixes are fictitious tales sold to consumers who are desperate.

“We’re not actually getting rid of debt with a consolidation loan, we’re restructuring it in a more manageable way,” instructs University of Wisconsin Extension financial specialist Michael Gutter. “Oftentimes, consolidation loans can end up costing money; fees, closing costs. And if you’re spreading the debt over a longer period, a greater finance charge in the long run.”

The problem with debt consolidation is it can feed the tendencies that put you in this predicament in the first place. In some ways, it’s like giving drugs to a drug addict. All this does is heighten the addiction and extend the length of their withdrawals.

Additionally, if you are looking towards debt consolidation for a solution, odds are that you won’t qualify for the low interest rates “As Seen on TV.” Those go to people who are responsible and have good credit.

Still, if your New Years resolution was to be disciplined in spending and payments, debt consolidation may be worth the risks.

Debt Consolidation Loans = Easier Management

Convenience and “saving time” should not be underestimated; time saves money. Instead of paying 15 creditors who are charging different rates at different times of the month, you take on one big loan and pay off all those accounts. This results in a simple payment on that loan once a month.

Again, this probably won’t result in direct savings. If you are already in debt the interest rates charged will be high. Shop around to find the service that will offer the best rates. Once found, you now have the cheapest consolidation service to compare your current payments with.

Using a loan calculator, sum the total of fees and interest on all your existing accounts. Compare those numbers with consolidation options to gauge what method will save the most money.

Finally, double check to make sure the chosen lender is reputable. There are many services that are out to make a quick buck and are scams. Through research and careful evaluation you will avoid these traps.

Financial recovery is not attainable through a quick fix. Finding ways to better manage debt and spending are sure fire ways towards financial recovery.