Credit Card Debt Counseling

In this article, you will learn about the basics of credit card debt counseling. The information will help you determine whether counseling is a viable choice, among your options for debt relief.

credit card debt counseling

Debt counseling is among the most frequently used debt relief and money management choices for people trying to bring excessive debt under control.

What exactly is credit card debt counseling? It involves seeking financial advice and help from specially trained professionals in the field.

An independent debt counselor or representatives from a debt counseling agency help you tailor an action plan and implement strategies to remedy your financial situation.

Here's how debt counseling works: Say you are juggling several credit cards. You have the money to make payments on some of the cards, but maybe not all of them.

Added to this, you car loan and mortgage or rent are taking a toll on your monthly finances, making your financial situation even more vulnerable.

You haven't missed a payment, but fear it could happen. You feel you could use help in sorting out your finances, which may include consolidating multiple credit card payments into one payment and/or setting your monthly budget on track.

In addition, you may want assistance in looking at your various card interest rates to see if there is a way to reduce the interest you are paying and save some money along the way.

Services Provided by Debt Counselors

If you are thinking along these lines, then credit card debt counseling may be a good option for you. It is important to note that debt counseling includes a variety of services that range from helping you proactively manage loans and payments to effectively managing your finances for the long term.

Services offered include the following.

  • Negotiating lower rates for your payments
  • Establishing an agency-managed debt repayment plan. This involves having you deposit money each month into an account from which your creditors are paid according to a payment schedule the counselor develops with you. Some credit counseling agencies charge little or nothing for managing the plan; others charge a significant fee over time.
  • Helping you establish a budget to live comfortably within your means
  • Providing money management counseling to help you remain debt-free for the future

The ultimate goal is to give you the tools to help you eliminate your debt rather than fall back into spending habits that got you into your current situation in the first place. 

Agency Selection Tips

While credit card debt counseling is beneficial, it is important to exercise caution when selecting an individual counselor or agency. Unfortunately, the finance and debt industry is fraught with many fraudulent companies, which are more interested in taking your money than helping you get the debt relief you need.

Therefore, the Better Business Bureau (BBB) advises individuals to interview several credit counseling agencies before making a decision to proceed. Request free information about the services provided.

If you are asked about the specifics of your financial situation before the agency will send you information, seek help elsewhere. Also, check for any complaints that may be filed with the BBB, Attorney General's office and any other consumer protection agencies in your area.

Here are the questions you should ask before finalizing your decision to work with a credit counseling agency or specialist:

  • Are all agency services and records kept in strict confidence?
  • Will you receive an individualized action plan for reducing your debt?
  • Are all credit counselors certified?
  • Does the agency provide educational opportunities to learn about budgeting and credit management?
  • If the agency arranges a debt repayment plan where you deposit money into a managed account for payment, how will your funds be protected?
  • Are the agency and counselors accredited?

Please see the articles below for more information on credit card debt counseling.

Related Info - Credit Card Debt Counseling

More about Debt Counseling

Credit Card Debt Services

Debt Management Plans

Questions to Ask Before Signing Up for Counseling Services

What to Expect When Meeting with Your Counselor

Credit Counseling Services - Doing Your Part

Free Credit Card Debt Help

Credit Score Ratings

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