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Consumer Credit Counseling
(CCC, Debt Management, 501c3)
Aside from the traditional credit card consolidation,
other forms of credit card debt help that are available to
consumers in a variety of financial situations include consumer
credit counseling wherein a counseling service will negotiate
with creditors to lower their interest rates, allowing the
consumer to make headway on the principal of their debt. While
effective, consumer credit counseling is not for everyone,
as it can affect the consumer's credit and bind them to a
lengthy program that may not be right for them.
Take the time to carefully examine your options
so that you are sure to choose the method through which you
are likely to achieve the most success. Should this be the
option right for you, we will go over different payment options
to see what best fits your budget. Contact
us now to learn more.
What is Credit Counseling?
Many credit counseling companies offer their
services through local offices, on the Internet, or on the
telephone. Under a reputable credit counseling program, your
creditors may be willing to reduce your interest rates and
waive over-limit or late fees. You will make one payment each
month to your counseling firm, which will distribute the funds
accordingly to the creditors. In return, you must agree to
stop using your credit cards and not apply for additional
cards or other lines of credit.
Many credit counseling companies have faced
scrutiny for misusing their "non-profit" tax status
and not providing the counseling and consumer education, as
required. Although companies advertise themselves as "non-profit",
there is no guarantee that their services are free, affordable,
or legitimate. In addition to making the monthly payment against
your debt, credit counseling companies generally require up
front fees in addition to their regular monthly "maintenance"
fees.
Be wary of credit counseling organizations that:
- Pressure you for voluntary donations towards their program.
These are simply disguised fees.
- Do not disclose the negative consequences of their program
on your credit.
- Refuse to send you information about their services without
first requiring you to give your personal financial information
or account numbers.
- Try to enroll you in a debt management plan the first
time you speak with them without first reviewing your personal
financial situation.
- Offer to enroll you in a credit counseling program without
providing you the required budgeting and money management
education.
What
is Debt Settlement?
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