Credit card debt is a fact of life for many people, particularly when the economy is weak. Used wisely, credit cards can be an invaluable lifeline during tough times, especially balance transfer and low interest credit cards. However, it is all too easy to allow credit card debt to spiral out of control. For those who are overwhelmed with credit card debt, credit counseling agencies are a popular source of information, assistance and advice. These agencies can help consumers negotiate interest rates, consolidate debt, set up a budget or payment plan and much more. Unfortunately, there are plenty of unscrupulous agencies out there that can do more harm than good. Finding a trustworthy credit counselor may take a bit of work. Here are a few things to consider.
Credit counselors can and should do much more than just consolidate your debt. A good credit counseling agency should offer advice on money and debt management, help you develop a budget and offer free materials and credit card debt management classes. A reputable credit counselor will review your entire financial situation and work with you to develop a personalized plan to pay off your credit card debt. Beware of any credit counselor that promises to eliminate your debts entirely or makes any other claims that sound too good to be true. Although credit counselors can negotiate the amount of your debts and interest rates, no credit counseling agency can legally rid you of your credit card debt.
Reputable credit counselors will send you free information about their agencies and the services they provide without requiring you to sign up for their services. You should be able to check them out with your state’s Attorney General, local consumer protection agency and Better Business Bureau. Just remember that not all credit counseling agencies are licensed in all states; be sure to find one that is licensed near you. Additionally, credit counselors should be accredited by at least one nationally recognized organization, such as The Association of Independent Consumer Credit Counseling Agencies. For more information, see the National Consumer Protection Week 2009 website.
Although many credit counseling agencies do charge a fee of some type, there is no need to pay an arm and a leg for this type of service. Some agencies have a set fee structure, while others allow customers to pay just what they can afford on a voluntary basis. Remember that you are seeking credit counseling because you can’t handle your credit card debt load, so adding to that load by agreeing to a high monthly fee is not in your best interest. Keeping these things in mind will help guide you successfully through the process of choosing a credit counselor.
