Get Out Of Debt Through Credit Card Counseling

repair your credit

It can be a real blow to the ego to admit that we need credit card counseling. What may have begun as responsible borrowing or the opportunity to auto-pay some bills and easily book a plane ticket soon becomes a crutch when we fall upon hard times. Often, in times of dire need, the severe consequences of missing a few payments are over-looked. Before you know it, you have a low credit score and you've dashed all your opportunities for getting reasonable prices on cars, mortgages and future loans. If you're in way over your head, then hiring someone to counsel you may cost a little extra, but you'll get immediate relief from hounding creditors and you'll be on a path to more responsible borrowing.

Ten years ago, the National Foundation for Credit Counseling and their affiliates at Consumer Credit Counseling Services dominated the credit card counseling scene. They worked with creditors to negotiate payment plans, debt settlements and lower interest rates for people who were slipping behind. However, the rise in consumer debt prompted hundreds of start-ups who were as savvy in the world of advertising as they were credit repair scams.

Some of the competitors, which were often called "debt settlement specialists," charged big upfront fees to pay off multiple creditors for mere pennies on the dollar. Often, people would pay as much as $3,000 off-the-bat to get their accounts up-to-date, only to find that the debt settlers were not paying off their creditors at all! To find a legitimate business, it is recommended that you verify their identity through the Better Business Bureau and stick with one of the well-known, non-profit organizations, like the aforementioned NFCC and CCCS.

When dealing with credit card counseling services, investigate the company before signing up. You needn't pay exorbitant upfront fees for most legitimate companies. Consumer Credit Counseling Services, for example, only charges a 10 set-up fee. If the firm isn't affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies, then it could be a scam. If you find you have delayed or missed payments within the first month of services, then get out, as they may be pocketing your money. Also, beware of false promises to settle your debts for little or no money. If you've missed multiple payments over a long period of time, then you're going to have a low credit score for the next year or two. The information will stay on your record for seven years from the initial delinquency, so patience is needed to repair your credit.

You may be able to bypass credit card counseling by working on your own to create more responsible spending habits. Limit your impulse buys and begin keeping track of where each dime gets spent. You may be surprised! Treat credit card purchases like debit, subtracting from your savings each time you use it. Don't promise yourself you'll "pay it off next month" because you won't. If you feel like you need a friend, then you may still want to look for a credit card debt reduction company.