10. Know the Drawbacks
Before you take steps to consolidate debt you must know there are drawbacks involved with combining loan balances, credit card debt, and other bills. Though you might secure a great introductory rate initially through your bank or credit card provider, you must be prepared to redistribute debt and finances once again when the trial period ends. In some cases you will also be extending debt far beyond the original payoff period in order to lower payments. This could end up costing thousands of dollars more in the long run, had you paid the debt in full based on the original terms. The temptation to spend again is always a drawback as well, once you get in a better financial position and the pressure is off.
The decision to consolidate debt is an important one and should not be taken lightly. It is critical to consider all risks, plans, and possibilities before applying for or entering into any financial contract.