Credit Card Debt Counseling – Can the counselors offer hope to the hopeless?
People who have started incurring overwhelming large amount of debt on their credit cards are the ones who seek help of the debt counselors. There are many types of counseling options and among them, credit counseling or debt counseling is one such option.
Credit counseling, which is also known as debt counseling, represents a type of process that actually assists the lenders and helps them remain aware of the ways in which they can avoid falling in high interest debts that can’t be repaid on the spot. Even though you may feel that you’re solely responsible for your debts, no one in this world is perfect and hence everyone needs some kind of motivation. This is when the services of a debt counseling agency comes in.
Reasons to seek help of a debt counseling agency
Debt counseling, like other forms of counseling, engages individual attention with the help of trained professionals and helps improve the lives and problems of the debtors. With debt counseling, the advice and the guidance offered to the debtor clients isn’t limited to money management, taking spending decisions and budgeting but there’s more to it. Here is a short list of the services that you may expect from a debt counseling agency. You may also take them as the reasons to seek help of a credit counseling agency.
1. Draws a clear picture of your finances: When you seek help of a debt counseling agency, the first service that you may expect is that they’ll draw a clear picture of your finances in order to know whether or not you’re drowning in debt or you’ve just started incurring the same. He will take into account the total principal amount that you owe, the interest rates that you’re paying on each account and the due dates on which you have to make the payments.
2. Formulates a clean and frugal budget: After he knows where you stand at present, he will formulate a clean and frugal budget for you that will eliminate all the unnecessary expenses from your list. You have to follow the budget throughout the month so that you can live within your means. Let go of the aversion that you have with a budget and start following one.
3. Offer you money management techniques: The debt counselor will also offer you money management techniques if he sees that your main problem lies with making the wrong financial moves. He will tell you how to live within your means, how to save money and how to spend on your ‘needs’ rather than your ‘wants’.
4. Sign you up with a DMP: The work of a debt counselor doesn’t end with budgeting and personal finance management. If the counselor sees that your debt amount is too huge to be repaid through normal budgeting and personal finance management, he will sign you up with a DMP or a debt management program. Through this program, you can let go of the total debt amount by making single monthly payments towards the debt management program. The debt counselor will accept your payments and disburse them to the creditors.
Getting help of a debt counselor – A word of caution
When you’re desperate about seeking help of a debt counselor, you need to make sure you’re getting help of a genuine credit counseling agency. The agency should be BBB accredited and also registered with the NFCC and the AICCCA as this is the sign of trustworthy companies. Hence, before you take the plunge into seeking help of the credit counselors, you need to check the aforementioned things.
Credit card debt is commonplace as cards have become readily available. If you don’t think of getting out of debt on your own, you can seek help of a non-profit credit card debt counseling agency to ensure getting the best returns.