Archive for May 30th, 2007
Did you know that there are currently over 400 consumer credit counseling agencies operating in the US alone? If you conduct a search on the internet for consumer credit counseling services you will find a huge number of organisations advertising claiming to be able to save you huge amounts on your unsecured debt and have you debt free within a period of time. The big question is, are their services worth it to the average consumer who is struggling with their debt?
Some people say that engaging a consumer credit counseling agency is not required as you can pretty much conduct the services they offer on your own. Even if you aren’t able to do it in the same way that they do it, there’s no stopping you from consolidating your debts through free methods such as rolling all balances onto one credit card or consolidating debts through a home equity loan. Many people believe that they can also do debt negotation and debt settlement on their own by calling up their creditors and negotiating debt reduction deals on their own. This means that they either eliminate or prevent the need to use a professional services and thus will save on having to pay the fees for these services.
Yes, its true what people say, you can do this on your own and many people do. But I believe it takes a certain type of person to be able to succeed in doing this on their own and to keep it up such that they will be debt free. Not many average consumers with large debts are able to call up their creditors and negotiate good debt settlement deals - it takes a certain knowledge of how to do this properly and even if you did know, it doesn’t mean the creditor would agree to it. This is because the creditor sees you as just one person and with your large debts they cannot take the risk of agreeing to your proposed debt settlement program. There’s also the issue of motivation. If you were to set out on your own to do what a consumer credit counseling service delivers, you need to be motivated to make sure you stick to your program. I think in the hard times or the day to day lives of people when distractions come, its easy for people to take a break from their debt management programs or just give up altogether.
Consumer Credit Counseling services offer a great deal of benefits to the average consumer struggling with debt. The reputable agencies have been in business for a number of years and they are trained professionals. They can and will negotiate good debt settlement arrangements with your creditors. Creditors are more likely to accept these arrangements from a professional consumer credit counseling service rather than from Joe Average, as its less of a risk to them as they know these agencies can live up to their promises. Consumer Credit Counseling services also motivate you to make sure you see it out to the end. There is nothing like having someone or something to be accountable to when you are doing something that generally isn’t pleasant or something that you struggle with. Having a professional check up on you on a regular basis generally helps most people stay on path.
Finally a comment on finding the right consumer credit counseling service to work with - there are too many out there that will not deliver you much if any benefits. Look for consumer credit counseling agencies that have been in business for at least 5 years, are a member of reliability programs such as the BBB and charge a percentage of the savings they deliver. I think this is the most important one, as this makes sure that the consumer credit counseling agency is motivated to get you the best deals possible, as the more you save, the more they earn. Stay clear from services that charge you a flat rate no matter how attractive that flat rate may be. With flat rates, the consumer credit counseling service is not at all motivated to get you the best deal as they know they are going to get paid either way. Its also recommended that you find a consumer credit counseling service that will provide you a written guarantee on the amount they can save you.
Jack B shares about his story of how he was able to clear his debt after a debt crisis that nearly destroyed his life. Part of his battle involved engaging a consumer credit counseling service.
May 30th, 2007
Credit card debt reduction or consolidation makes it possible to lower your payments, decrease interest rates, get rid of late fee and put an end to the annoying calls of creditors. It involves borrowing a new loan, entirely for the purpose of paying off your existing debts on credit cards and a variety of other bills such as: personal loans, service bills, student loans, medical bills, legal bills, taxes, consumer product bills etc. Different lenders support some or all of these bills. Credit card debt consolidation helps people to reconstruct their credit rating and escape from the consequences of bankruptcy, simply by way of making low monthly payments.
Reduce Your Debt Pressure
Credit Card Debt Reduction is done in two ways. The first method is by combining all your debts, especially the credit card debts, into one. In this method, the consolidator negotiates with the creditor to reduce the total due amount. The other way of debt consolidation involves, transferring your current total debt into a new credit card with lower interest rate. This kind of Credit card debt consolidation program is also very helpful in clearing off your debts, as it enables you to put your debt into one small monthly bill and your interest payments are reduced.
What is interesting then is the fact that how these people with bad credit history are eligible for these credit cards with low interest rates. Not all people, who are neck deep in debt, are eligible for this kind of loan. The low interest rate may also be just a catch, as it may increase after a few months of your enrollment with the credit card.
The advantages of credit card debt reduction are more than one will believe to be true. It not only relieves you of the burden of debt, it also improves your credit rating or credit score, immediately. Credit score is directly proportional to the amount of credit available to you. So, when you owe a lot of money to a lot of different credit cards, your credit score falls considerably. When you transfer your dues onto a new credit card, you make only one payment each month and new credit is also available to you. Not only that, your existing debt is also reduced gradually. Thus, your credit scores increase.
Free credit card debt consolidation is a great option for people, who are not in a position to spend any more money on new products and services. The aim of these services is to help people with their credit card debts and other unsecured debts. These are non-profit organizations, which are devoted to the welfare of their consumers. They provide fair and unbiased advice to people and are therefore more preferred. They effectively carry out Credit Card Debt Reduction for them.
May 30th, 2007
You often see the ads for credit counseling during the commercial breaks, and you might think
you are too far in debt to bother with such a service. However, if you take the time to discover
the benefits of having an independent counselor review your debt situation, you would be better
off for it. Debt counseling is not for people whose debt situation is beyond repair. In that case
you make want to talk with a bankruptcy trustee. But if you have moderate debt, you may want to
take the time and visit one of these credit counselors in your local area.
Credit counselors act as a go-between you and your creditors. They negotiate with your creditors
to allow you reduce your monthly payments. Sometimes, depending on your situation, and how
you manage your credit, they could arrange to have some fees reduced or removed. But their
main task is working out a manageable repayment plan that both you and your creditors can live
with. Creditors don’t like to accept reduced payments, but they much prefer to have a reduced
amount than to have you skip town owing the full amount of your debt. Your creditors will work
with the credit counseling agency to secure their money, and give you some breathing room.
However, once you decide to seek counseling for your debt, you would need to consider several
factors before deciding on the right credit counseling service. Pay attention to these four points as
you narrow your search for helpful advice:
- It is important the firm have qualified employees who have enough financial training to help
you. They don’t have to be accountants, but must have the basic education in credit counseling.
- Is the agency accredited? It takes money to have your firm accredited by most standard
setting bodies, so some firms shy away from such accreditation. On the other hand, some firms
hide their shady dealings behind the same standard setting bodies. And it is sometimes difficult
to tell who is legitimate. So start with the accredited agencies, but check them out before you
decide to choose one. However, keep in mind that many of the agencies listed are nonprofit
bodies.
- The Fees that they charge. Any of the better credit counseling services will only charge their
clients a small but reasonable monthly fee around $30 for the use of their services. However, you
may find that some also charge an up-front fee around $50.
- Application to a Credit Counseling Service. When applying for the services for credit
counseling the company should clearly state what their fees are, what are the services they
provide, and how long it takes them to work on your application.
You should have these four points in your mind before you begin working with a reputable credit
counseling agency. Once the application phase is over, you should be well on your way to
managing your debt. This means, you can reduce the stress that comes with carrying a heavy debt load.
May 30th, 2007
