It can be a real blow to the ego to admit that we need credit card counseling. What may have begun as responsible borrowing or the opportunity to auto-pay some bills and easily book a plane ticket soon becomes a crutch when we fall upon hard times. Often, in times of dire need, the severe consequences of missing a few payments are over-looked. Before you know it, you have a low credit score and you’ve dashed all your opportunities for getting reasonable prices on cars, mortgages and future loans. If you’re in way over your head, then hiring someone to counsel you may cost a little extra, but you’ll get immediate relief from hounding creditors and you’ll be on a path to more responsible borrowing.

Ten years ago, the National Foundation for Credit Counseling and their affiliates at Consumer Credit Counseling Services dominated the credit card counseling scene. They worked with creditors to negotiate payment plans, debt settlements and lower interest rates for people who were slipping behind. However, the rise in consumer debt prompted hundreds of start-ups who were as savvy in the world of advertising as they were credit repair scams.

Some of the competitors, which were often called “debt settlement specialists,” charged big upfront fees to pay off multiple creditors for mere pennies on the dollar. Often, people would pay as much as $3,000 off-the-bat to get their accounts up-to-date, only to find that the debt settlers were not paying off their creditors at all! To find a legitimate business, it is recommended that you verify their identity through the Better Business Bureau and stick with one of the well-known, non-profit organizations, like the aforementioned NFCC and CCCS.

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This entry was posted on Thursday, October 30th, 2008 at 6:26 am and is filed under Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.