The best way to handle any debt is to be able to pay it off without any help. Sometimes that just can't happen. Making minimum payments can sometimes be a challenge if your situation changes.

Debt consolidation is a solution sought out by many debtors who are in too deep. This can be achieved by transferring all debt to a low-interest credit card, or by taking out a home equity loan. There are also debt consolidation or credit counseling services that consumers can utilize.

How do these services work?

With credit counseling, you work with the creditors for a lower interest or payments. Late and over-the limit fees are often forgiven. The client sends just one single payment monthly to the credit counseling agency to be distributed to the creditors.

The Pros

A credit card counselor can usually negotiate a lower rate or payment if you can't. You will be able to pay off your debt faster with the money you save. You can also plan a budget to repay your debt and also still have some money left for other things if the counselor helps you.

The cons

Sometime the monthly payment may be too high for the client to pay. Creditors will only negotiate so much and sometimes the deal they offer may still be too much to handle. If this happens you may have to find an alternative plan to repay your debt or consider bankruptcy.

Credit counseling services charge fees that are added to your monthly amount. If they don't do this they will usually obtain the money from your debtors as a part of your payment.

It's still not sure as to how your credit is affected by going through credit counseling. Usually you will have to finish the program to get new credit but it could still affect you as many people who lend you money think of credit counseling to be like Chapter 13 bankruptcy.

Check out a prospective counseling agency first. Just because they deal in credit counseling, it doesn't mean that they are all honest. The Better Business Bureau can help you with this.

It's important to weigh the pros and cons of credit counseling. You may not need to involve another party if you just take the time to work with your creditors first.