credit card problems


Credit Counseling

Keeping up with the Jones’ seems to be the national past time these days.  Unfortunately, the Jones’ are probably in some pretty heavy debt and all that glitters really isn’t really gold, but in fact a gold Visa card!  Credit is easier to get than ever, even for those of you who have already gotten in over your head.  On any given day, many people will find applications from credit card companies—right along with the late notices from accounts they now have.

If you find that you’ve fallen victim, and are in over your head, there is help.  Credit counseling is one way to attack your debt problem head on! 

Look online or in your local phone book to find a good, reputable credit counseling service.  One word of warning—don’t answer an ad or call anyone who claims that they can repair your credit, or give you a new credit identity.  It’s a sure thing that they are running a scam, and you will simply waste time and more of your money. 

Reputable credit counseling services have some criteria you must fulfill, and although it varies from organization to organization, the basics are that you must have a source of income and a specific amount of unsecured debt.  (They won’t be able to help you with secured debt, such as automobile loans and home mortgages.)  Once you have chosen an organization and made an appointment, you should be prepared to take in all copies and statements from your current loans.  They will need to see the balances that you owe, and in addition, what monthly payments are expected from you.   

You’ll find very knowledgeable people who will sort out your bills and consolidate them into one payment every month.  You will have the option of making your payment directly to the credit counseling service, and then they will make sure that it gets to your creditors every month—on time.  Credit counseling is really quite amazing in that the counselors have an uncanny power of negotiation with creditors and many times are able to reduce (or eliminate) interest rates, waive late and over-the-limit fees, and work out better repayment terms.  This will help you pay off your debt much faster than you could on your own. 

But the credit counselors don’t stop there!  Once they have managed to get your debts contained and into a monthly payment that you can afford, they will begin to work on your budget and spending habits in order to improve you financial health even more.  They will prepare a personalized budget for you, and then show you how to spend without getting into trouble, and even how to save.  Some offer software packages that you can use at home to implement your new budget.  In addition, they will be available for questions and can help you sort things out if something unexpected comes up.

One thing that you should know; if you decide to use credit counseling services, is that you will be required to cut up your cards as part of the package!  In fact, a few credit counseling services have been known to make little collages out of all of the pieces and hang them on the wall.  But the good news is that getting your debt paid off will help to rebuild your credit, and after it’s all paid off (and you’ve developed good spending habits), you can talk to your counselor about trying again.  But until then, break out the scissors!