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July 6th, 2009

Consumer Credit Counseling Relieves Debt Stress

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Recent reports of credit card companies increasing charges to consumers and the possible role of debt stress in the death of singer Michael Jackson highlight struggles associated with carrying large amounts of debt. Dealing with seemingly insurmountable debt can negatively impact all aspects of your life. If you can’t see the light from beneath  a mountain of credit card debt, consumer credit counseling services may be able to help.

Credit Card Debt Consolidation Through Consumer Credit Counseling Services

Credit counseling services typically offer debt consolidation by working with you and your creditors to develop an affordable repayment plan. Instead of paying several credit card bills each month,  your credit counseling service charges you one monthly payment amount based on the terms of your repayment plan and the service charge for the credit counseling service. Benefits of using a consumer credit counseling service include:

Waivers of late fees, overlimit fees and reduced interest rates: Consumer credit counseling services neogitiate fee waivers and reduced rates that enable you to pay off debt faster and at less expense.

  • Make one monthly payment: Your credit counselor can help with debt management through a debt consolidation /repayment plan. The credit counseling service pays your creditors; this reduces your risk of damaging your credit score with late or missed payments.
  • Eliminate or reduce calls from creditors: Depending on arrangements made with individual credit card companies, consumer credit counseling services usually communicate with creditors on your behalf, and ask that you refer creditors or collection agents to them.
  • Track your progress:  Consumer credit counseling agencies typically provide statements showing how your payments are applied and document progress toward paying off your debt. Seeing your progress can help keep you motivated.
  • Signed agreement: Consumer credit counseling services provide a written contract or service agreement that discloses the terms of your credit card debt consolidation plan and specifies payment amounts and due dates along with other terms and conditions.

Consumer Credit Counseling Services: Things to Consider

Credit counseling services provide prorams designed to expedite getting out of credit card debt, but it’s important to understand their requirements.

  • Closing your credit card accounts: As part of their agreement with credit card companies, consumder credit counseling services require clients to close their credit card accounts as part of their debt consolidation agreement.
  • No magic “fix” for credit reports: Consumer credit counseling agencies cannot alter credit reporting for events that occurred prior to enrolling in your credit card debt consolidation plan. If you’ve made late payments, or otherwise defaulted on credit card accounts, this information remains on your credit reports.
  • Buyer beware: Choose consumer credit counseling services with care. There are plenty of scams out there; if something sounds too good to be true, look elsewhere for help.

Get started with credit card debt consolidation today and leave debt worries behind.

Post written by Karen Lawson

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  • Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score. Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management. He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others. He can be contacted by visiting his personal site, GoodCreditLiving.com.

  • Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.

  • Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno.

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