Turn on a radio station or daytime TV, and you can hear the catchphrases: “Low monthly payment!” “Settle your debt!” “Free consultation!”
Welcome to the world of debt consolidation, an alternate reality where anyone’s debt can be charitably eliminated. It’s become a thriving industry in the wake of the Great Recession.
How does it work? The consolidator explains that they bundle together a debtor’s outstanding balances, lower the interest rates, and charge a single, smaller payment. That way, they claim, even the most unbearable debt can be paid off— by virtually anyone.
Sounds too good to be true. How does it really work? Ah, you’re gaining perspective! There are no free lunches in the for-profit financial world.
Despite the promise of a “free consultation” (a bait and switch tactic to sell the service to the debtor), a debt consolidator attaches a fee to every payment. That’s how they make money.
And how does that “low monthly payment” come about? The consolidator simply extends the periods of the loans. That’s more interest to your creditors and more fees to the consolidator, so you fork over more cash.
The other bait and switch: debtors with bad credit are lured by the promise of low interest rates, when the consolidator’s advertised rates only apply to best case scenarios. Another no-win.
But I’m still trapped in debt! Help! Don’t panic. You can replicate some of the positive effects of consolidation on your own:
Take a look at yourself. You don’t need a free consultation to realize that you’ve been living an unsustainable lifestyle— otherwise you wouldn’t be trapped.
Debt grows when you spend more than you pay back, so make it your financial goal to live within (or below) your means. That stops your debt from growing.
Negotiate with your creditors. You don’t need a representative to lower your interest rates— just call customer service! Have your income data and monthly balances ready, and you and your creditor can create your own reduction plan.
Get credit counseling. Non-profits want to ease your debt without any tricks or gimmicks. They’ll be honest and straightforward about your finances: exactly what you need.
Anyway: my name is Alexander Carl. I am a recent graduate of the University of North Carolina at Chapel Hill, where I spent four blissful years earning a degree in Communication Studies. Now I face the real world of economic downturns, student loans, and the absence of “academic” camaraderie.
Yet I refuse to be bummed. My economic philosophy is to live simply, save, and maximize whatever I can. Consumer culture is undeniably pervasive, but you don’t have to sell your soul to co-exist with it— there is great power from using your economic resources wisely.
I started writing when I figured out how to hold a pencil. Since then I’ve written short stories, poetry, screenplays, and have blogged. In fact, three of my screenplays have been produced into short films, two of which I directed. I’m no stranger to the media, having served as a DJ at a freeform radio station and worked as a crew member for live TV.
Pastimes include traveling (I’ll visit virtually anywhere), swimming, jogging, hiking, and hunkering down with a good movie.
Overall I’m a peaceful person, though not in a creepy New Agey way. I get my energy from music, good conversation, and the outdoors (I was an active Boy Scout, earning my Eagle). I consider myself “inquisitive” and “wry”, and for the sake of autobiography I’ll assume that I am.
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