Struggling with Credit Card Debt? Credit Counseling May Help

Consider credit counseling if you need help with credit card debt

By guest blogger April Lewis-Parks. April is a certified credit counselor and Director of Education at ConsolidatedCredit.org.

Being in credit card debt has become the American way. According to the Federal Reserve, Americans are carrying 874 billion dollars in revolving debt. While the Visa, MasterCard and AMEX logos are displayed on most storefronts, having a credit card doesn’t give consumers a free pass to go shopping. With unemployment statistics staying unchanged at 10% and creditors adding more fees, consumers are struggling to make their credit card payments.

More than ever people need to distance themselves from credit card dependence before they fall into financial crisis. Speaking with a credit counseling agency is the first step to finding a solution to your debt problems. They can review your current financial situation and give you advice on smart use of credit, creating a budget, paying bills and managing money. Credit counselors are also knowledgeable about the different options: debt consolidation, debt settlement and bankruptcy. They can advise you what program will work best for you.

What is Credit Counseling?

Some people have been wondering what credit counseling is and how it can work for you in terms of getting yourself out of credit card debt. Credit counseling is a straight forward process that is geared toward educating consumers on how to avoid incurring debts that they cannot pay back. Professional counselors, certified in credit counseling, are hired by credit counseling organizations to help consumers find ways to repay their credit card debt – through careful budgeting, financial education and management of money.

Credit counseling attempts to lower interest rates on credit cards and figure out one monthly payment that you can afford while satisfying your creditors. Credit counseling agencies have relationships with creditors and therefore are able secure better terms so people can get on a plan to dig themselves out of debt while maintaining their credit score. With a debt management program you pay back the entire principal of that you owe, but at a fraction of the cost due to the lower interest rates. Another benefit of this type of debt consolidation is they can usually have all of your late payment fees reverted and any assessed penalties waived.

What’s the Difference?

Debt settlement and bankruptcy are more drastic options that can have long-term, negative effects on one’s credit score. These options should only be considered once you’re pre-qualified by a credit counseling agency. Speaking with a credit counseling agency has no negative effect on your credit score, so you risk absolutely nothing by reaching out.

When choosing a counseling agency check with the Better Business Bureau records for the company you are researching, you should be able to get a decent indication on whether or not the company is a good one. Carefully research the companies before doing business with them. Check out their website, speak with a counselor, and make sure that the counselors are certified credit counselors.

Ultimately, the credit counselor will help you develop a plan that works for your unique situation.  With that being accomplished, the creditors will then be getting the money they are owed and you will be stabilizing your financial future by ridding yourself of unsecured debt.

If you would like financial guidance you can assess your situation by taking a Free Budget and Debt Analysis, or you can call 1-800-320-9929 to speak with a certified credit counselor at Consolidated Credit Counseling Services.

The views and opinions expressed are strictly those of ConsolidtedCredit.org and not of CreditReport.com. CreditReport.com assumes no responsibility for the accuracy of this information.