Number of Payments Isn't the Problem

Tessa asks Dave to explain why debt consolidation is so bad.

QUESTION: Tessa on Twitter asks Dave to explain why debt consolidation is so bad.

ANSWER: Because you feel like you did something. People tell me, “Dave, I got a second mortgage. I paid off all my debt.” No you didn’t. You moved your debt, and now it’s owed against your house. You didn’t pay it off. You just moved it around. And here’s the thing: If you get a lower payment and you moved it around, you feel like you did something and so you don’t do anything about getting out of debt. Interest rates aren’t your problem. Number of payments aren’t your problem. Your problem is the guy in your mirror getting pissed off enough at your situation to go fix it. Trying to borrow your way out of debt is not a plan.