Credit counseling
posted in General Finance |Credit counseling (in some countries, also known as debt counselling) is a process offering education to consumers about how to avoid incurring debts that cannot be repaid. This process is actually more debt counseling than a function of credit education.
Credit counseling often involves negotiating with creditors to establish a debt management plan (DMP) for a consumer. A DMP may help the debtor repay his or her debt by working out a repayment plan with the creditor. DMPs, set up by credit counselors, usually offer reduced payments, fees and interest rates to the client. Credit counselors refer to the terms dictated by the creditors to determine payments or interest reductions offered to consumers in a debt management plan.
Credit card debt:
Credit card counseling can be a person’s best friend when it comes to helping you get out of of debt and a road to financial stability. It seems that where ever you go, you are bombarded with luring credit card offers.
Sign up for this card to get 20% off your purchases. Sign up for this card, to get bonus points and flyer miles. The advertisements are endless.
Unless you have a strict policy in place to pay off your credit card balance to zero every month, it is easy to fall into credit card debt.
Credit counseling is probably the best method available today to help people who are drowning in credit card debt. Credit card helps to lower consolidate all your payment into one easy payment, lower your recurring balances and payment terms.
Be aware that you will be required to may your monthly payment directly to ensure that your payment is made on time and in full.
Do your research. There are plenty of fraudulent credit counseling companies out there that prey on people’s desperation.
It should also be noted that many credit counseling services employ people hired off the street who are then trained in credit counseling. Thus the person helping you may not have any formal training in financial management other than what they received when they got hired as a credit counselor. This training is usually minimal and focused only on the services provided rather than a full course on financial management
Online credit counseling resources:
The National Foundation for Credit Counseling
Consumer Credit Counseling Service
American Association of Debt Management Organizations
Association of Independent Consumer Credit Counseling Agencies
