Borrowers must beware of debt consolidation loans

NEW YORK -- The pitch on late-night TV or in mail solicitations is appealing: Consolidate your credit card debt! Slash your monthly payments!

A debt consolidation loan might be tempting to many who feel overwhelmed by monthly bills.

Credit experts say, however, such offers should be accompanied by a big "BORROWER BEWARE" notice.

"A debt consolidation loan is not necessarily a bad thing," said Kathy McNally, vice president for financial literacy at the nonprofit National Foundation for Credit Counseling in Silver Spring, Md. "But you have to make sure it's not one more loan."

The bottom line, she said, is: "If you don't change your buying and borrowing habits, you're just adding to your debt."

Jordan Goodman, author of "Everyone's Money Book," said many Americans are suffering from what he calls "the treading water syndrome" -- their minimum payments don't make a dent in credit card balances boosted by more spending, high interest rates and late fees.