Thursday, January 22, 2009

Credit Counseling as a Tool to Better Manage your Debts

By Paul J. Easton

When you recognize that you have so much credit card debts hanging over your head, you may be surprised to come across the point realizing that you basically do not have enough money coming in to pay all those debts and cannot probably afford the basic living expenses. A lot of people make this mistake of maximizing their credit cards to the extent that they cannot cope with the timely payments. They thought of setting aside these problems and plans to pay them later. In reality, however, this plan does not happen and they end up having more debt.

If you realize in yourself to have this same unfortunate situation, you must take a step backward and have an assessment with the situation. Face the reality and ask for some help. But this does not mean that you may automatically have to file for bankruptcy; not unless we find some help first.

You can find help how to get rid of credit card debt with the aid of a legitimate, non-profit credit counseling program. Debt counseling and credit counseling are related services offered in these programs. The terms are constantly interchanged do a definition for both terms are provided. Credit counseling services are aimed to teach consumers about their debt and how to make use of their credit intelligently. Debt counseling services, on the other hand, are offered for consumers who have not followed a sound financial advice and are usually dealing a larger amount of debt than they can manage to pay for.

There are various credit counseling programs out there that offer these services to help you get out of your debt. Be wary, though, not all have your best interests at heart, there are some agencies that only want to take advantage of you. Remember to take your time and search for a sincere credit counseling agency with a long history of good reputation. This makes you confident that you will be making a decision that will lend a hand to you in this problematic situation rather than worsen this already bad situation.

Your counseling agency will work with you in determining the right financial plan and will assist you on submitting proposals to all of your credit card lenders. With their guidance, you increase your chances that lenders will accept the terms you have come up with. Typically, the proposals include a request to end all late and extra fees on the account and, if still negotiable, lower the interest rates to a more reasonable rate.

In addition to helping you get rid of credit card debt, your credit counseling program will likely educate you how to better handle your money. This will direct you steer clear of financial mess in the future. After all, teaching you how to manage your money, and keep it, is the number one goal of every counseling program.

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