Credit and Debt Counseling

Credit and debt counseling can help consumers learn to manage their income, expenses, or debt more effectively. With help from an advisor, consumers will have the opportunity to realistically review their spending to create a budget that will allow them to live within the income of the household. This will also assist consumers on the subject of debt consolidation. Not all consumer counseling is beneficial, so it is important for the individual to be aware of the history of the organization before signing a contract or commitment.

Increasing debt is a national concern. Consumers are using credit cards to purchase items for daily living, which is causing the amount of average debt to rise per person in the United States. As a result, consumers are finding it more difficult to get out of debt and are crying out for help in stopping the vicious cycle of spending future earnings. Now, credit and debt counseling has become big business as new counseling agencies are springing up to rush to the aid of consumers. Most of these agencies will help consumers develop a budget, review their spending habits, and aid in consolidating their financial obligations.

Services offered by a counselor can aid a consumer with negotiating interest fees. A credit counselor will contact a consumer's creditors and negotiate with the credit card companies or bank lenders for lower interest rates, or in some cases for no interest rate at all, allowing the consumer to pay only on the principle balance. Also, in some cases, a credit and debt counseling service may be able to negotiate for a settlement or pay-off. With the services, counseling can be a major benefit, relieving the stress of collection agencies or the harassing phone calls of bill collectors.

Not all credit and debt counseling services are the same. There are for-profit counseling services and non-profit counseling services. Using a service that charges large fees for applications and large percentages in negotiations could cost the consumer even more in the long-term. Consumers should thoroughly investigate any agency that is under consideration. Ask to speak to other clients for referrals and ask about a 501(c3) non-profit government standing with the IRS. The Internet can be a good place to begin to gather information about potential agencies or organizations that offer assistance. Taking the time to pray to God for guidance can also be effective. "The effectual fervent prayer of a righteous man availeth much." (James 5:16)

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