Debt Consolidation and Consumer Credit Counseling Offer Hope to Millions

In fact I think everybody could need Consumer Credit Counseling.
All who have to deal with money in our complicated society could need to have a talk with a credit counselors at a Consumer Credit Counseling Agency . And that´s the most of us, is it not? For some, not because they are in trouble, but to be sure they never will be. For others, they are already in trouble with their finances, and will sure need some help. If it is not to late.

There are many out there who want to sell you Consumer Credit Counseling services.
Before you choose one, ask what they cost? If you are in financial difficulties, don´t get deeper because you are getting services that cost you to much, more than you can pay. Since the late 80’s and early 90’s, the number of credit and debt counseling agencies in America increased significantly, and many of them are not working for their clients first, but for themselves, second for you. As the marked of people with money problems grows, so do the group of helpers, Consumer Credit Counseling and others, grows too.

Therefor look out for them who is there mostly to get your money
and don´t care too much if you are getting into deeper trouble. If you smell them, run as fast as you can.
Organizations who have criticised the credit counseling industry, say that credit counselors serve the interests of the creditors over the interests of consumers. Credit counselors respond that their job is not to take sides, but to take care of all parties equally to help resolve debts.
But my main point is; you can sure get help from Consumer Credit Counseling if you use a little time to find the right one. You can even get help from the reading books. Some authors know their stuff, and have helped a lot of people without needing to pay a lot for Consumer Credit Counseling.

To become in need of Consumer Credit Counseling
is a shame to some. Don´t feel that way! Everybody may need help now and then. What may be worth being shameful for is not seeking help. There is help for all, whoever you are, and some counseling are non-profit Consumer Credit Counseling.

Debt consolidation and consumer credit counseling
go hand in hand. Increasingly people are realizing that if they are to solve their debt problems and prevent them from returning in the future they will need consumer credit counseling.

You draw all your debts
together into one affordable monthly loan. Debt consolidation and consumer credit counseling helps you to budget and raises awareness of your options for debt consolidation.

The first step in debt consolidation and consumer credit counseling
is usually a review. This is confidential and forms the basis of your debt management program for the future. It will help you to budget in the future and discuss the correct debt repayment schedule for you. Debt consolidation and consumer credit counseling are both freely available via the Internet, over the telephone and also in person, either free or for a nominal fee.

Debt consolidation and consumer credit counseling
allow you to reduce the interest payable on your loans, or maybe even eliminate it altogether. Your debt counselor can be a great ally for you, stopping your creditors charging you late fees on payments you don't manage to make in time. Just these few simple benefits can see you steadily catching up with your debt repayments.

Debt consolidation programs
can considerably reduce your monthly repayments. Your consumer credit counselor can negotiate with your creditors to stop them from hassling you with phone calls and letters and to lower your monthly payments; they can do this either by getting your creditors to lower their interest rates or by getting them to write off some of the actual body of your debt that you can't afford to repay. One great benefit of combining debt consolidation and consumer credit counseling is that you can get some professional guidance on budgeting and managing your money.

Why Participate in Debt Consolidation and Consumer Credit Counseling?
Quite honestly - because you should try to avoid bankruptcy if you can. A combination of debt consolidation and consumer credit counseling is the most effective way of avoiding bankruptcy and solving your debt problems not just for now but also long-term.

How Does Credit Counseling Affect Your Credit?

After you have paid your regular monthly
bill on your credit counseling plan, your debt counselor will be able to work with your creditors to re-age your accounts and update your credit status to show you are getting back on track. Creditors are usually happy to back off and work with you on these programs as that way they have a good chance of getting paid. Debt consolidation and consumer credit counseling is an efficient way of getting out of debt and rescue your credit rating.

The best free debt advice you'll ever get!

I've decided to create a list to take the confusion away for those looking for help with their credit card debt.

The top 5 things you MUST do to get out of debt faster.

1. CALL YOUR CREDITORS

While this may seem incredibly obvious, I am constantly surprised at how many people haven't taken the time to call up their creditors and tell them about their situation. The number one thing you want to ask is, "Based on my payment history, am I eligible for a better interest rate?"

As my mom used to say, "The squeaky wheel, gets the oil." You may be eligible for a better interest rate, and often all you have to do is ask. It doesn't hurt to try! If your creditor says yes, GREAT! If not, all you lost was a phone call.

2. DO A BUDGET

By far this is the most overlooked AND most important step of getting help. Most peopl avoid doing this because they often don't want to see their situation on paper, and/or they think they don't have the time. GIVE ME A BREAK! You don't have time not to do this...the quicker you get a hold of your finances the sooner you stop working just to pay your credit cards. MAKE the time. Their are all kinds of free budget worksheets online, and I hvae one included in the Free Debt Workbook on my site. DO THIS STEP!

3. PUT TOGETHER A LIST

Once you've gotten an idea of where your money is going, and how much you are currently spending on your debts, you needs to put together a list of WHO you owe and EXACTLY HOW MUCH you owe them. You can't get out of debt if you don't know where you are starting.

4. RESEARCH YOUR OPTIONS

There is a lot of confusion as to what debt programs are out there, and which is best for your situation. For most people their are only 2 options.

One option is Consumer Credit Counseling, which is often mistakenly called debt consolidation.

Consumer Credit Counseling is for those who can afford their minimum payments for at least the next 5 years AND have high interest rates on their credit cards. These companies charge you a monthly fee and they help lower your interest rates. THEY DO NOT LOWER YOUR MONTHLY PAYMENTS significantly, if at all. A common misconception is that because you are staying current with your creditors, these programs are good for your credit. In reality you will not be getting lending while you are in a Consumer Credit Counseling program.

The other option for most is Debt Settlement.

A debt settlement program is a program in which you save up money, and have a company negotiate your debts with your creditors. A good settlement company will get you out of debt for about half of what you currently owe including their fees. Example: You owe $100,000 dollars. The settlement company will get you out for a total cost of about $55,000 dollars.

These programs hurt your credit while you are in the program, and are for those who are already behind, or those that know they can't pay their minimums for the next 5 years. I happen to be a manager at a settlement company, and I can tell you, not all settlement companies are created equally. Do your research on the company BEFORE joining. They should be members of TASC, and they should have a good BBB rating.

5. CHOOSE A PROGRAM IF YOU NEED ONE

If you've done the first 4 steps, this one should be pretty easy.

Look at your budget from step 2, and see how much you can afford to put towards your debt. then compare that with the quotes you got from step 4.

A general rule of thumb is, if you can pay your creditors for the next 5 years, then a CCC program might be better for you than a settlement program. If you are already behind, and can't afford your minimums, you should be looking at a settlement program before you even consider a bankruptcy.

America is often called a consumer society, and it's true. We're also a nation of credit card debt, which is evidenced by some of these startling facts.

We all know that acquiring overwhelming debt is stressful from a financial standpoint. However, it might surprise you to know that more than 70 percent of divorces in America are brought about due to financial problems.

One thing Americans are NOT is savers. We simply don't put away enough money to protect us in the case of financial emergency. In fact, the average American consumer carries so much debt load that they're a mere three paychecks away from having to declare bankruptcy.

Financial emergencies arise all the time, of course, but Americans continue to build up credit card debt, without thought of the possible consequences. That's why nearly 1,500,000 people in the United States are forced to file for bankruptcy every year. Another 1,500,000 people will turn to the various consumer credit counseling organizations for help in order to try to avert bankruptcy. That's a staggering number, but it's dwarfed in comparison to the 37,000,000 people who endeavor to work out plans with their creditors on their own. That's 40 million people a year who are in enough financial trouble to take drastic action!

How do people get in such horrible financial condition? One way is through the use of credit cards. They may be convenient, but they certainly make consumers pay more for the merchandise they buy. For instance, a person paying for a purchase with a credit card will pay, on average, more than 130 percent for that item than if they had simply paid cash for it.

A large majority of consumer only pay the minimum payment on their charge cards, but those payments are generally 90 percent interest, with only 10 percent going toward reducing the principal. A staggering 71% of all credit card holders pay only the minimum payment, and they do it without a thought to the consequences. If they can easily afford the monthly payment, they just keep paying it, without realizing how expensive their purchases ultimately have become.

If you are one of the millions of Americans who are only paying the minimum amount on your charge cards, start paying MORE each month. Even if it's only a little more. Reducing the principal balance will shorten your overall payment schedule--sometimes by hundreds or even thousands of dollars.

The statistics are mind-boggling, and with interest rates headed even higher, you must educate yourself on the wise use of credit, pay cash whenever possible, and try to live within your means, even if it means doing without some things. It's the only way you can avoid becoming one of those sad financial statistics yourself.

Copyright © Jeanette J. Fisher

How Much of a Mortgage Can I Afford?

Homebuying Advice from the Credit Counseling Professionals

As a leading provider of consumer education, credit counseling and debt management services, ACCC has the following insight into the best way to stay on top of your mortgage payments:

Before you even begin the home buying process, you must first examine a few economic factors. Your total income and your total debts serve as the most important factors for considering how much of a mortgage you can afford. Most mortgage lenders base their decision making on two basic guidelines:

1. A homeowner’s monthly housing costs should constitute no more than 28% of a household’s total monthly pre-tax income. Monthly housing costs usually include your mortgage principal, your interest and your real estate taxes.

2. Monthly housing costs and other long-term debts combined should constitute no more than 36% of a household’s total monthly pre-tax income. Long-term debts usually include car loans, homeowners insurance, car insurance, and credit card payments.

When preparing to buy a home, saving money for a down payment can be the most difficult step. A large down payment will ultimately decrease the size of your loan. By paying more money up front, your monthly mortgage payments become smaller. The traditional 20% of the cost of the home can often add up to tens of thousands of dollars up front. When considering the amount of money to use as a down payment, take into account the following variables before making your final decision:

 What are the closing costs on the home?

 Is there any repair or construction work needed on the house?

 Are there any large-scale purchases required in the near future?

For more information about the homebuying process or the homebuyers’ counseling that ACCC provides, call 1-800-769-3571.