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Wed, Feb 10, 2010
are credit counseling agencies the best way to reduce credit card debt?
8 Responses to “are credit counseling agencies the best way to reduce credit card debt?”
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February 10th, 2010 at 11:02 pm
you don’t get to "reduce" your credit card debt by going into credit counseling agencies–you bought the stuff, now you have to pay for it–so suck it up and pay for it…
if you don’t have the self-discipline to "just do it" you might want to consider debt counseling…
my husband and i used cesi several years ago–you can’t have a credit card while you’re doing it (you CAN have a debit card from your bank account tho)…they take one payment each month and pay each of your creditors–it keeps the creditors from jacking up your interest rates and adding late and over limit fees…we even had one bank drop our interest to 0% while we were in the program…
cesi was good for us because we were able to change our terms when times got really tough and when things got better we were able to increase our payments…we were able to pay off higher interest rate accounts first and only pay the minimum on the 0% card (we never would have had 0% if we had tried to do it ourselves)
we eliminated $40,000 in cc debt that way–but make no mistake, you don’t get to just say i don’t want to pay for it…
February 10th, 2010 at 11:02 pm
No, the best way to reduce your debt is to pay it off and never go in debt again!
February 10th, 2010 at 11:02 pm
they are one way 2 reduce it.. but be careful because some are scammers. i used one. i can’t remember the name of it. but they reduced the interest rate 2 a single digit number, stopped the late payment fees and overlimit fees. i made one payment 2 them and then they divided the money up amongst the creditors as per our agreement. i donated $5 a month to them for that. some will charge u an upright fee but this one didn’t. it was 2 cover the cost of paper, cuttng a check and stamps.. i paid off SEARS so quick my head almost spun.. lol.. and 1more thing.. u can’t use the cards u consolidate while ur in their program..
try calling ur creditors 1st and ask them 2 rearrange a payment plan w/u, lower ur interest, and mayb changer ur payment date. if ur going thru a hardship, let them know..
February 10th, 2010 at 11:02 pm
There is a tremendous amount of misinformation spun into the marketplace regarding a consumer _ s credit reporting rights. Here are 10 of the most prevalent myths.
Myth #1 When I pay off an account, it will no longer be reported or considered to be
negative…. WRONG! Usually it is re-reported and re-aged!
Myth #2 If a negative item is deleted it will just come right back on my report. WRONG!
Myth #3 Certain items like bankruptcies, foreclosures, tax liens, and repossessions are
impossible to remove from a credit report….WRONG! Anything on a Credit File can be changed or removed!
Myth #4 Disputing a credit report is easy and consumers can easily do it themselves.
Wrong! Most consumers get frustrated and give up because of the obstacles put before them by the Credit Bureaus!
Myth #5 The Credit Bureaus will read my 100 word statement and take my side of the story into account… Wrong! If it was that easy then everybody would have good credit!
Myth #6 Credit Bureaus are infallible, a branch of the government, or otherwise beyond reproach… Wrong!
Myth #7 I can get a new credit file by getting a federal tax ID number… Very Big Mistake! This is illegal!
Myth #8 If I build enough good credit; it will offset my bad credit. Wrong!
Myth #9 A credit counseling service can help me restore my credit rating. Wrong!
Myth #10 The law requires that an item remain on my credit report for 7 years. Simply not so!
February 10th, 2010 at 11:02 pm
Credit card counseling agencies I believe offer the customer a consolidated loan at a lower interest rate to pay off debts and or can help you get your interest rates lowered on credit cards and help you develop a plan for paying it all off. If you in debt and are getting a big refund do yourself a favor and pay off a credit card bill.
February 10th, 2010 at 11:02 pm
I have mixed feelings about these services….they "can" be a good way to deal with overwhelming credit card debt, assuming: that you are just at the point of being overwhelmed with credit card debt AND you are not yet way behind or in default on your cards.
They can negotiate reduced interest and payments. They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it difficult to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would might be denied while you’re enrolled in the CCCS debt management program…You can get a referral at: http://www.nfcc.org
While an accredited credit counseling program like CCCS can be good you need to be aware that these programs are funded by the credit card industry and this can create an obvious conflict of interest in the advise they give you. I advise against using CCCS if you are drastically past due or have already complete defaulted on most of your credit cards….If this is the case then you are better off negotiating settlements directly with your creditors. You may be able to settle in the 25% – 50% range if your cards are already defaulted. If you settle, get all terms in writing. They will probably want a large lump sum rather than small payments over several years. CCCS will not negotiate settlements because they are funded by the credit card industry.
February 10th, 2010 at 11:02 pm
no credit counseling will not reduce nothing. all that they do is reduce interest.
if you want to reduce your principal balance your only option is debt settlement.
i used debt free league, they reduced my debt by 50% and gave me a lower monthly payment.
February 10th, 2010 at 11:02 pm
http://debtreliefreviews.net has good reviews on credit counseling programs.