It seems that whenever we turn on the TV we see ads for consumer credit counselling to help us with debt solutions. There are some experts who say this is a great way for consumers to get out of debt, while others say to never use a credit counselling service. So what do you do? How can you make a decision if it is right for you? Do Some Research There is literally hundreds of different credit counselling services to help manage your debt out on the market to choose from. Take your time and do some research before using any of these services. Never join the first one you come across. Ask any credit counselling service some of these questions: - How does the debt service determine your monthly payment? - Are they a non-profit agency? - How much will your interest rate be when you sign-up for their service? - How much money does the credit counselling service receive each month? - What happens if you later decide you want out? - How much money will each of your creditors get each month? All of these questions are important ones to ask any credit counselling service. If you are going to be making a $500 monthly payment, but $200 is going to the credit service for their fees, then this may not be a very good deal for you. You may be able to spend the extra $200 on some of your credit cards and reduce your debts on your own. If the monthly fee for a credit counselling service is only $25, then it may be a good deal to use their service. That is if they can work with your creditors and get your interest charges reduced. BBB Another area that you should check on the reputation of a specific credit counselling service is with the Better Business Bureau. The BBB will allow you to see any complaints that have been filed against the company, as well as if the complaints were resolved. This information is nice to have in making a decision as to which credit service to go with. Monthly Responsibilities After you have made a decision on which credit counselling service to use, you need to keep yourself up-to-date on what is going on with your accounts. Be sure to review your monthly statements and check to be sure every creditor is being paid and being paid on time. There are some dishonest credit services out there that will take your payments and then not pay your debts, or pay them late. That is not helping you a bit. Negotiating On Your Own Most people don't understand that they can negotiate their debts with credit card companies themselves. Call your debtors and talk to them. You may be able to work out lower interest rates, lower payments and new payment arrangements. Let them know you're having trouble making your payments and why. If you are considering bankruptcy, let them know that too. Most every company will work with you, not against you. There is even a chance you can negotiate a better deal on your own than a credit counselling service can do for you. Keep these ideas in mind when you're deciding on using a credit counselling service to reduce your debts. It can save you money in the long run. |
