Credit counseling services - What you must know

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Excessive credit card debt - Get out of debt
Most people advocate the case of credit cards, quoting the benefits and convenience that arises from them. However, there is another group/line-of-thought that strongly opposes credit cards. The reason being 'Excessive Credit Card Debt', which is one of the most serious problems faced by the credit card holders and credit card industry. However, you can't pull the shutters on the credit card indus... Read debt consolidation article



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Credit counseling services - What you must know
If you are one of the millions of Americans who have tons of credit card debt you may be considering using a credit counseling service. In fact, if you're considering filing for bankruptcy, a new law will make it compulsory to work with one of these services. But the credit counseling industry is filled with sharks and there are a few things you need to know before you jump into the water with them.

First of all, recognize that many credit counseling services - even the "non-profit" ones - can actually leave you in deeper debt than when you started. They convince you to enter one of their "debt-management" programs and begin charging large fees (which are often hidden) that can end up making your total debt significantly larger. It's a huge scam that many people have fallen prey to. Make sure you aren't one of these people!

To protect yourself you must learn how to recognize the difference between a real credit counseling service and a scam. A good service will provide helpful debt advice, work with your creditors, lower your monthly payments, help you set a budget, and charge you a small monthly fee for their services (usually no more than $20 a month). They may also charge a small set-up fee that shouldn't be more than $50.

A "scam" credit counseling service can often be easily identified by their aggressive marketing and sales techniques. These are the companies you see advertised just about everywhere now: in magazines, newspapers, television, internet, and through spam email. They offer quick fixes to your credit problems and promise to be your new best friend. Often, their ads will prominently display their non-profit status, hoping those words will instill a sense of trust in people. But, in reality, these companies seek the non-profit, tax-exempt status in order to evade state and federal consumer protection laws

So what can you do to protect yourself from scammers? Take your time and do your research. Here are a few tips for finding a good credit counseling service:

- If possible, work with a credit counselor in your area who you can sit down with on a regular basis, face-to-face.

- Check with your local Chamber of Commerce and Better Business Bureau to see if there are any outstanding complaints against the counselor you are considering. If there are, you probably want to choose another service.

- Find out if the agency offers free educational material. A "real" credit counselor will want you to be knowledgeable about how their services work. A bad counselor will want to keep you in the dark so they can get your money.

- Ask about fees. If the setup fee and/or monthly fees seem too high, go somewhere else. Also, find out if they keep any percentage of the payments you send them. Scammers will often try to keep a large percentage of the first payment as part of their "voluntary" fees.

- Ask how the counselors are compensated. If they work on commissions or get incentives for signing people up for debt consolidation programs walk away.
v - Make sure that the agency is accredited and that your counselor is trained and certified.

- Call your creditors (usually your credit card companies) and ask if they will work with the credit counseling service you're considering. If they won't the service can't do you much good.

- Get all of the counselor's promises and terms in writing. Don't think that any verbal promises they make are binding.

- Be sure that the agency you choose provides you with monthly reports that show who is receiving your payments and how much they have been paid.

By doing your research and asking the right questions you can protect yourself from credit counseling scams. A good counselor will help you solve your debt problems. A bad one will only make them worse. Take your time and choose well!

Jamie Clark is a writer and researcher for Credit-Counseling-Truth.com. For more useful information and resources related to credit counseling visit http://www.credit-counseling-truth.com today!

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How to avoid credit card traps

Credit card secret traps are the hidden side of plastic that keeps you in debt that is difficult to pay off. The main objective of credit card companies is for you to carry the largest balance you can possibly repay.

Trying to avoid these credit card secret traps is tricky because credit card companies constantly raise your credit limit, and offer you perks to get you to charge even more.

Credit card companies can get very creative with fees and interest rates and that's where you can get into financial trouble. To avoid this from happening here are some common credit card secret traps to be aware of when you compare credit card company terms.

Two Cycle Billing

The two cycle balance method is where the interest on your average daily balance is computed using both your purchases from that billing cycle and charges from the month before.

Even if you paid off your entire balance from the month before, that figure is still used along with your current month purchases to calculate your average daily balance. This credit card secret trap can keep you in deep debt for decades.

Credit Card Grace Period

A credit card grace period is the number of days before the credit card company starts charging you interest on new purchases. Most cards have a grace period but beware of the cards that don't.

If you have a card with no grace period, you always pay interest on new purchases from the day you make the purchase, even if you pay your bill in full.

Cash Advances

You almost never get a grace period for cash advances, which means you begin paying interest on that advance right away. Also, the interest rates on cash advances are typically higher than the ordinary rate on card purchases. A cash advance is costly and one of the most common credit card secret traps.

Credit Card Late Fees

Credit card companies can impose hefty penalties on any balance that you pay late or balances that exceed your limit. But the penalties of credit card late fees don't end there.

If you violate even one of your credit cards terms, other credit card companies may also punish you with penalty rates even if you have never missed payments on them.

Interest Rate Changes

Credit card companies are allowed to change your interest rate anytime, provided they give you 15 days notice. So read what your credit card company mails you because some companies will sneak this by hoping you won't catch it.

The bottom line is read the small print in the credit card terms provided by the card issuer regarding the credit card company rules concerning the billing method, grace period as well as the interest rates and fees.

Also, think about how you will use the card, especially if you expect to carry a balance. Then, compare credit card company terms and try to choose the card that keeps you from falling into these credit card secret traps.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative articles that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to:
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Credit counseling services - What you must know
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