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Credit Card Applications » News » Other » Choosing Credit Counseling

Choosing Credit Counseling

April 12, 2007 | Updated on April 12, 2007
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The content is accurate at the time of publication and is subject to change.

Applying for credit, know what sort of help you get when fail…

The number of best credit card applications offered by largest USA credit card companies is rising and so is the size of consumer debt. More than ever customers are rushing for credit cards to be more financially successful and comfortable but the lack of credit education sends its word of destruction.

If you are reading it, you are evidently interested in credit cards and are probably using one at the moment or going to apply. We are here to tell you what may possibly happen to you as a credit card holder, be it the best cash back or lowest APR credit card, what help you can get and whether it is qualified and fair.

Any individual walking with a credit card might have heard of the Consumer Credit Counseling Service, a once non-profit outfit suggesting payment plans and negotiating lower interest rates for customers in unmanageable debt or facing bankruptcy. For your convenience you can find a Consumer Credit Counseling Service in about any city but is the quality of the service the same?

Well, doubtful and you need to be twice as farsighted if you mean to turn to their help. What has changed? It’s the drastic rise in consumer credit card debt and thus the increase of the number of services and competition among them. They spend fabulous sums on advertisements and maintenance and they have to earn their living somehow.

The result is, many of the outfits, claiming to be specialists in credit debt settlement, are not that qualified and honest at all and are more interested in collecting money from ignorant or inexperienced customers than helping them out of the debtor’s prison.

Frustrated? You needn’t be as if all the credit counselors were self-profit, bankruptcy would swallow up the whole credit card industry. In fact, there are best credit counseling services that can help credit failures back on their feet, you only need to know how to identify them. On the other hand there are brief or shadow credit counselors who trick money put of you and disappear with it, leaving you in credit disaster.

Let’s play a game now. Imagine you’re a customer in need of help with credit management. Smooth things down going through the following steps:

  • Do not panic, keep presence of mind and ask yourself honestly: do I really need a credit counselor’s help? Is my credit that bad that there’s nothing I can do myself? Maybe it’s within your power to pay credit bills and be current on all your accounts? Do not be that eager customer at the expense of which dubious outfits exist. Calm down and analyze the following:
  • Are you unable to pay the minimum monthly payments on your credit card?
  • Are you constantly late or do you default your credit card bills?
  • Have you failed in working out a reasonable plan of debt management with your creditors?

If you get 3 “yes”-s, then you move on to the next step and a Consumer Credit Counseling service is the place to go. Go, but watch out for pitfalls before you sign up!

  • If there arises an upfront fee of a lot more than $10, be sure it’s deception. Most likely, on pulling cash out of you, the credit counselors will promptly die out, shut down their cell phones and start their business anew under another name.
  • Keep an eye on your first months’ payments. Some counselors can use the payments as a fee and will not send it to your creditors. These payments will be rated as late or missed, hurting your already damaged credit.
  • Watch for accreditation!
  • Shadow companies give you unrealistic promises like those that they can kill out your debt for little money and no hurt to credit rating. But remember what incredible setup fees they charge!

You are a lucky one if you manage to sign up for debt management plan with a legitimate, nonprofit credit counselor company. Yes, it is going to take time and effort. Yes, it will have some effect on your credit history but at least you’ll pay off your credit debt and save your cash…

Once you decided you need credit counseling, read more on how it works and what effect it may have on your credit file.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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