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Before we talk about Credit Card Debt lets first get to know what a debt is.

Debt is that which is owed. It can be to someone or to a company. This is usually referencing assets owed, but the term can cover other things. If you talk about assets, debt is a means of using future purchasing power in the present before a summation has been earned.

A debt is created when a creditor agrees to lend a sum of assets to a debtor. In our society today, debt is usually granted with an expected repayment usually this will also include an interest.

So thats it, lets now get to know debt consolidation. Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, in most cases this would be a house.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

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