Credit card debt has long been a mounting problem in many of today’s developed nations and especially in the United States. The average American family in 2009 had over $8,000 in credit card debt alone, not counting mortgages and other loan expenses. Today that number has fluctuated very little, and in many of the nation’s more affluent states it has actually gotten larger. A huge part of the problem that led to the current economic recession was consumer reliance on credit to pay for faulty loans and mortgages. The loose standards by which credit card companies judged the eligibility of clients to take out low-interest rate credit cards made it easy for people to fall into a bad credit card cycle.
One thing that makes getting out of credit card debt such a difficult challenge is the fact that the system under which credit card companies function is not set up with the consumer’s best interests in mind. To put it another way, almost a third of the credit card industry’s $65 billion yearly earnings come from customer late fees and over the limit charges. It’s good business for them that you stay in debt.
This doesn’t mean that getting rid of your credit card debt is impossible, though. In fact, with the right credit card counseling services, anyone can do it, and in less time than you might think. There are consumer credit card counseling services that can help you come up with a solid plan to lower the interest rates and fees on your credit card debt. There are also debt settlement companies that help you reduce your debt through a negotiation process. Neither process is easy, and it does take time, but the good news is that you do have options available. People just like you have been using these solutions to become debt free for years.
You are doing the right thing by starting right here to learn about credit card counseling, debt consolidation, debt settlement and other useful options that will prepare you to ask the right questions and come up with a solid financial plan to get rid of crippling debts for good.
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Scott : February 20, 2007 10:09 am : Credit Card Debt Counseling
Many of these companies are non-profit counseling entities in the eyes of the government which means they are required to assist people in need of debt help through free educational materials, financial advice, and budgeting help. Consumer credit counseling services also provide paid services called debt management programs. The primary objective of consumer credit counseling debt management programs is to help you get ahead of your debt problem by reducing your interest rates, eliminating fees, and consolidating your payments.
They will set you up with a monthly payment plan that often lasts around 5 years. You will pay them one fixed amount and then they will be responsible for paying each of your creditors seperately on your behalf. They will offer you ongoing support throughout the program on an as need basis.
If the consumer credit counseling company is non profit, the fee for their service is capped by the government. Typically there is a modest set up fee over $100 and then a monthly management fee that is probably less than your electricity bill.
For many people the savings on the interest rates & fees, the advice, and the coaching they provide make this a valuable service with debt amounts that are more than they are comfortable with. Without these consumer credit counseling debt management programs, many people would never be able to ge their debt under control due to the speed with which the payments grow due to the rising interest rates.
Scott : January 15, 2007 8:51 am : Credit Card Debt Counseling
In general credit consolidation counseling companies provide consumers with family financial educational information and debt management services. For all intensive purposes as far as the solutions they can provide you, consider the terms credit counseling and debt management to mean same thing since the basic service you get is the same whether you work with a company that calls itself a credit counselor or one that describes itself as a debt management company.
So what do they do?
They consolidate your debts into one payment and they are often able to lower the interest rates and fees you now pay. They act as an intermediary between you and the credit card companies who, once they know you are in a credit consolidation counseling program, are more likely to work with you to help prevent further rapid debt accumulation.
You may refer to my posts about debt management companies here to learn more about credit consolidation counseling.
Also, you may request more information about my Top Debt Management Companies here and learn more about the information and consultations they can provide you.