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Get Out Of Debt Through Credit Card Counseling
By plrprousers | December 15, 2008
It can be a real blow to the ego to admit that we need credit card counseling. What may have begun as responsible borrowing or the opportunity to auto-pay some bills and easily book a plane ticket soon becomes a crutch when we fall upon hard times. Often, in times of dire need, the severe consequences of missing a few payments are over-looked. Before you know it, you have a low credit score and you’ve dashed all your opportunities for getting reasonable prices on cars, mortgages and future loans. If you’re in way over your head, then hiring someone to counsel you may cost a little extra, but you’ll get immediate relief from hounding creditors and you’ll be on a path to more responsible borrowing.
Ten years ago, the National Foundation for Credit Counseling and their affiliates at Consumer Credit Counseling Services dominated the credit card counseling scene. They worked with creditors to negotiate payment plans, debt settlements and lower interest rates for people who were slipping behind. However, the rise in consumer debt prompted hundreds of start-ups who were as savvy in the world of advertising as they were credit repair scams.
Some of the competitors, which were often called “debt settlement specialists,” charged big upfront fees to pay off multiple creditors for mere pennies on the dollar. Often, people would pay as much as $3,000 off-the-bat to get their accounts up-to-date, only to find that the debt settlers were not paying off their creditors at all! To find a legitimate business, it is recommended that you verify their identity through the Better Business Bureau and stick with one of the well-known, non-profit organizations, like the aforementioned NFCC and CCCS.
Perhaps you’re waffling back and forth on whether you really need credit card counseling or not. Generally, if you’re able to pay your bills and are current on all your accounts, then do not call credit counselors to negotiate lower interest rates for you. If you’re too far in debt, then credit counseling may also not be able to help you and bankruptcy may be the only option. If a repayment plan takes more than 2-4 years to complete, then bankruptcy is a better option. However, you may be in the market for credit card debt reduction if you can’t pay the minimum balances on your credit cards, if you’re consistently late paying one or more of your bills, if you’re being hounded by creditors and collection agencies and if your attempts to work out a reasonable payment plan have failed.
Credit card counseling may not be for everyone, but it’s worth looking into if you feel you have nowhere else to turn. The best way to resolve bad credit debt may be to declare bankruptcy or to change jobs to make more money. You’ll need to become better organized and keep track of your spending as well. The worst thing you can do is just ignore everything until you have money. Communicate with your creditors and arrange a repayment plan if you can. If not, it may be time to call the credit card debt reduction negotiators.
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