What about credit card counseling?
When you are struggling to bring back your financial stability, who do you approach?
Is it a credit counseling expert or a bankruptcy lawyer?
Often, credit card owners with bad credit will seek the help of a credit counselor rather than a bankruptcy lawyer.
They believe that they can still bring back on track their finances without filing for bankruptcy.
But, will credit counseling really help?
Before you respond, there are some things that you must first know and understand.
What is Credit Card Counseling?
Credit card counseling is the method of providing information, guidance, advice, and debt management plans to consumers by a credit card counselor who is an expert in credit cards, debts, and credit laws.
The counseling is done for the purpose of helping consumers how to avoid getting into heavy debts and repairing their bad credits.
It is also a way of creating an established plan for debt relief that consumers should maintain in order to get back to their financial soundness.
Part of the debt counseling service is the negotiation with creditors to establish a credit management plan for the benefit of the consumer.
This plan will enable the consumer to pay off debts at longer period and affordable amount.
How to Choose the Right Credit Counseling Service Provider?
Being in deep financial trouble is not a good state to be in.
Credit counseling can be your solution.
However, picking the wrong service agency can be more damaging.
Therefore, it is imperative that you choose the right debt counseling company.
You should interview several agencies before you make your final choice, if you consider working with a credit counselor.
Check out these companies with your local consumer protection agency, Better Business Bureau, and the state Attorney General.
They should provide you with their brochure that includes information about their services and company profile.
To determine whether the counseling agency is the right one for you, gather information on:
- If their credit counseling services are confidential.
- Are the credit counselors hired by the agency certified?
- Is the plan that the agency will devise for you suits your needs?
- Is the agency accredited and licensed?
- Will they protect your funds? How will they do it?
- Is budgeting and credit education being offered by the agency?
- Are their charges and fees reasonable?
- Is it a profit or non-profit company?
- Is their record with previous clients favorable?
What are the Benefits of Credit Card Counseling?
Seeking the help of a counseling agency can help you in numerous ways.
The benefits include:
- You will be able to come up with a structured plan that will help you pay off your credits.This plan is created after discussions on your current financial situation.
- Your late fees or interest rates can be reduced or eliminated.
- The agency can negotiate with your creditors to lower your monthly amortizations.
- You will be relieved from annoying calls from creditors.
- Best efforts to free you from your debt within five years.
Why Will Credit Card Counseling Fail?
Credit card counseling is aimed towards the creation of a credit management plan that will guide and help you pay off your credit.
However, failure happens if you are unable to handle your finances.
The plan will also fail if you are not able to raise the funds needed for payments.
Lastly, it will fail if you drop out of the credit management program.
The success of debt counseling is partly dependent on your cooperation and willingness to finish paying off your credits.
Everything that you need in order to succeed is provided by the counselor, all you have to do is to do your part sincerely.