Credit Counseling

 

Understanding Your Credit Counseling Options

 

Find Out More...

 

 

About Consumer Credit Counseling

 

Consumer Credit Counseling Service (CCCS) companies assess the amount of debt you can afford to repay each month.

 

They discuss your financial situation with creditors and persuade them to reduce your monthly payments until all debts are paid. A signed agreement commits you not to incur any further debts before the existing debt is paid, and to make a single monthly payment.

 

 

Pitfalls of Consumer Credit Counseling

 

Consumer credit counseling services can help you reduce your
interest rates by consolidating all of your debts into one payment,
and you could become debt free in 4-7 years. However consumers commonly report difficulties with their counseling program due to financial obligations exceeding their expectations.

 

* monthly payments can be too high
* credit card companies are not always willing to lower interest rates
* repayments are not always accounted for or passed to the right creditors 

 

Furthermore, most leading consumer credit counseling services are funded by the credit card companies. Consumer Credit Counseling Service (CCCS) organizations were formed in the 1980s by a major credit card company to recover money from consumers who had fallen behind on their payments. Over 50% of consumers who start a CCCS program fail to complete. The primary motivation of most CCCS agencies is to collect as much money for creditors, and they generally charge a fee for their services.

 

 

Debt Consolidation: Terms & Conditions

 

Debt consolidation transfers all your existing debts into a single loan with the possibility of a lower interest rate. It is important to ensure
you are able to meet repayments. This means being aware of the term of the loan and the interest rate. Check that the loan will be fully paid
off over the life of the loan and there are no extra charges or conditions such as a balloon payment at the end of the loan

– as this often leads  to the another long-term loan and cycle of debt.

 

 

Hidden Fees and Charges

 

Most services require payment in the form of money order or certified check. Fees for certified checks can be as high as $13.00. A stamp brings the cost to $160 p.a. (including the stamp to send the payment).

 

Non-profit credit counseling employees require payment. This fee
comes from the money you give to each creditor. Creditors typically
pay Consumer Credit Counseling Services a fee equal to 11% of your repayments. Some agencies request management fees which are deducted from your monthly payments.

 

Find Out More >>>