Rolling all credit card payments into one neat bundle, and at a lower amount, is one of the most popular methods of becoming debt free. With more and more consumers up to their knees in unsecured loans, the notion of doing a consolidation of debt makes sense. It's the method used that is important.

Traditionally, consolidation of debt meant working with a company that specialized in just that. Also traditional was taking out a secured loan to pay off all the credit card or other unsecured debts, and it generally meant a secured loan. Most commonly, a second mortgage, home equity loan or even refinancing of an owned car or boat. While this did get the consumer clear through consolidation of debt, it also left them with a long term loan to pay off. The interest rates are often not great because by the time a consumer needed the loan, they were behind in payments and their credit rating had taken a good hit. Even worse was that if things didn't improve financially, the collateral could be seized and even foreclosed upon.

These days there are more options for consolidation of debt. Debt settlement and debt management work in slightly similar ways and don't require a loan. The principal of rolling all debts into a smaller single monthly one is the same, but professional negotiators work with the consumer's creditors to reduce the amount of principle involved. The consumer pays into a monthly account, which is set up by a debt resolution company, and once there is enough to start paying off the debts, the company manages it all. Debt relief companies are good at getting creditors to knock off hefty portions of the amounts owed. Often it can be as much as 50%. This enables both the creditor to receive a portion of the principle back, and helps the consumer to get out of debt faster.

For consolidation of debt, these two practices make sense. The consumer is usually rid of debt within twelve to thirty-six months, and without having put up collateral. If a consumer is truly good at negotiation and has the time, some can do their own program, but having professional help eases the strain of it. Debt resolution companies do the hard work, and allow the consumer to get on with their life. It's one thing that truly seems worth the cost.