The act of opening a credit card can be helpful or hurtful depending on your credit history.
An inquiry can negatively impact your credit score.
Generally, personal loan interest rates are lower than interest on other types of unsecured debt, so you’ll save money over the life of the debt.
Credit counselors work to help you negotiate with your creditors and formulate a debt management plan (or DMP) to help you pay off your existing debts.
But debt consolidation is not always the best way to deal with debt issues, and it has drawbacks you should be aware of before you move forward with it.
What’s more, there are several ways to go about consolidating debt, and depending on your circumstances, one method might make more sense for you than another.
Debt settlement involves accounts being reported as settled for less than originally agreed. With a debt management plan, you’ll make one monthly payment to the credit counselor, who will then disburse the funds as agreed to your creditors until your debt is paid off.
Keep in mind that you’ll have multiple accounts that depend on your monthly payment.