Financial Planning

The consumer credit counseling business is a huge industry in America, since the average American is a mere three paychecks away from facing huge, potentially devastating financial difficulty. Each year, more than a million Americans turn to credit counselors to try to help themselves regain control of their financial burdens. But just how the credit counseling business works is a mystery to most consumers. What’s involved when you hire a credit counselor?

It may come as a bit of a shock, but the first thing you need to understand is that consumer credit counselors don’t work for YOU! That’s one reason their ads on television, radio, and in your email box shout, “Our services cost you nothing!” However, any business needs to derive income from somewhere, so if they’re not charging you, who does pay them? In truth, they work for the lenders. Here’s how it works:

Regardless of what their commercials would have you believe, credit counselors don’t renegotiate the overall amount of your debt–that is, the total principal balance you owe to your creditors. Instead, they negotiate with the various lenders to decrease your interest rates. For instance, let’s say that you’re paying somewhere around 18 percent on the charge card you want help with (some stores still charge as much as 21 percent). A credit counselor will contact the cardholder and negotiate a lower interest rate–sometimes as much as half the original rate.

That’s the good news. The not-so-good news is that your minimum payments will still be based on a 90/10 split, meaning that 90 percent of your monthly payment will still go toward paying interest on the card. That means, as is the case with any credit card payment, it will be well worth your while to pay a little more than the minimum each month, in order to whittle down your principal. It will save you significant amounts of money in the long run.

But how can credit card companies continue to make money by cutting interest rates in half, and what do they have to gain by doing so? The first reason is because they know that it’s better to get something, which they’ll do if you continue to pay them, even at a reduced interest rate, than to risk having you default on the entire amount. The second reason is because, even at the reduced rate, the lender is still making a healthy profit. They have borrowed that money at a significantly lower rate–sometimes as much as 66 percent less than the rate they’ll be charging you. (That’s why the financial institutions have big buildings; they make huge amounts of profit.)

Credit counselors CAN save you money, there’s no doubt about that. But don’t be fooled into thinking that they work for YOU, because they don’t. In the end, credit card companies love credit counselors, because the counselors truly work for them. That’s why you don’t pay for credit counseling services. The credit card companies are happy to pay them for you.

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Credit and debt are something which can only creates tensions in consumer’s life nothing else. Getting out of debt is not an easy thing it require lot of efforts and self motivation. There are a lot of programs through which consumers can get rid of debts which they are not able to pay. Some of most important programs are debt consolidation, debt settlement, credit and debt counseling and bankruptcy. Every one of these has some good as well as some bed points. Its consumer choice, that which program they like most suitable for them.

Credit and debt counseling in Texas both are specially designed for those consumers who really want to get rid from there debts or it is for consumers who are interested to minimize there debts consequences. The important things is that consumers should go for some authorized and well reputed credit and debt counselor as there are also some inexperienced and fraud counselors which can only waste consumers money. If you want a credit and debt counseling in Texas than you should try to contact those consumers who have utilized the services of some credit and debt counselor as this thing helps you in finding out some good counselor.

Credit and debt counseling in Texas is helpful for consumers if they realize it especially for those consumers who really want to pay off there debts. A good credit and debt counseling in Texas helps consumers in managing there monthly payments and minimizing there total debts. Credit and debt consoler brings a positive change in consumer’s lives as they get rid from collection calls of creditors and collection agencies. Credit and debt counselor also helps consumers in maintaining good credit score. Consumers start feeling less pressure and less burden on there shoulders. Credit and debt counseling in Texas is gaining much popularity because of its several benefits for consumers. It depends on consumers that at what stage they decide to hire the services of some good credit and debt counselor.

Consumer credit counseling or credit counseling is a booming business but you do not need expensive advice from a stranger to tell you what your problems are. You already know you are a victim of a depression and out of money!

It doesn’t take a genius, certified counselor to tell you you’re the victim of a “pink slip hurricane” produced by a depression which was initiated by greedy big banking schemes and other big money institutions that rewarded top executives millions in bonuses for devising their worthless schemes.

Some high paid counselor is going to tell you they will provide high quality, certified help to design a debt management program that will lower payments, percentage rates, provide financial education and here is the best part of all, find you a debt consolidation loan!

In simplified terms they are going to ask you to “rob Peter to pay Paul” or to just keep paying “Paul” by sending them the money, adding their 15% handling fee and they will send your money in for you to make sure you are doing it. Wow!

The “can of worms” they’re trying to sell you is way out of date. Everybody knows you cannot borrow yourself out of debt. You cannot make the payments now so how are you going to make them when they add their 15% fee to the debt they’ve negotiated down to 60% for you?

Stop paying your credit card debt and stop worrying about it! You’ll have six months with a few late payment reminders before the bank is required to “write off” your account. Use those months to familiarize yourself with the Fair Debt Collection Practices Act.

The FDCPA is Uncle Sam’s consumer credit counseling manual available totally “for free” on the Internet. The manual will tell you what you “can do” and what debt collectors “cannot” do. There are two main points to memorize to become your own credit counselor.

The first is “never give a debt collector any information over the phone” and accomplish that task by telling the collector to “communicate with me in writing only” and hang up the phone. The only way a collector can coerce money from you is by your “admission” that you actually owe him money and you do not!

The second thing you absolutely must do is to answer any collection letters. You must “demand proof” from the collector that you owe him anything. Send a copy of his letter with your demand by registered mail with return receipt and keep a record of that communication.

When you do not answer a debt collector’s letter by demanding proof that you owe him money, the “wording” in his letter is legally designed so that you “admit” you owe him money if “you do not answer” his letter and his recorded phone communication is designed to get your “verbal” admission.

There are two other interesting things you may not have realized that you’ve learned. You’ll probably have enough knowledge to pass the “certification” test to become a consumer credit counselor if you like being nice to people and putting them into programs with a 90% failure rate.

The second thing you will have learned is how to become a debt collector, that is if you enjoy being mean to people on the phone and harassing them constantly but as Forest Gump says “that’s all I got to say about that.” The important thing is that you know how to get out debt.

Times are tough financially for many today. A great many Americans are having serious financial problems and are seeking a way to solve their debt. You may not be at the point of needing legal help with your debt yet, you may just need to contact a credit counselor that specializes in helping people in debt. In case you are thinking of filing bankruptcy, you may instead search out and find an experienced counselor in the area of consumer credit to help you.

Many times an experienced consumer credit counseling service can be an invaluable asset to a consumer that finds themselves in a financial quandary. Debt consolidation can save not only hundreds, or perhaps even thousands of dollars, but also can keep your credit history from being severely tarnished.

Whether it be credit card debt negotiation, business debt negotiation, or consumer debt negotiation, an experienced credit counselor often-times will know how to successfully work within the system that is in place to help save you money and to make your payments more affordable and more manageable.

Another reason to search out a credit counselor is that their way of solving your debt will also give you plenty of credit relief. This means that the obnoxious creditors will stop harassing you, and allow you to work on solving your debt through a consolidation plan.

You have to comprehend one thing here, and that is that no matter what type of credit you are trying to consolidate your accounts will be closed. Your credit rating may take a bad hit too during this. But in the long run you will benefit from consolidating, and the sooner you get all your debts paid off, the sooner your rating credit wise will heal.

The important thing is to be brutally honest with yourself when assessing your financial situation. For many Americans credit card debt has reached an all-time high. Credit card debt solutions can not only lower the high interest rates you are currently paying on credit cards, but can also greatly reduce the time in which it will take you to pay them off in full and be debt free.

This is the big advantage of finding the right solution to your debt problem, and the relief you can receive credit wise, finding the right credit counselor to work for. You have to stop the circle of making more debt as you are trying to pay off the existing debt you have. Disciplining yourself and using debt consolidation are the main two ways of being able to handle your finances again. The quicker this is accomplished, the speed at which your credit rating will start going up will increase.

Another advantage of working with an experienced consumer credit counseling service is that you will get an education on how to manage your debt going forward. Many times the professionals will show you their techniques for negotiating debt settlement. They are the insiders and many times will impart truly valuable lessons to their clients.

So if you are trying to solve your debt problems, I recommend that you find the debt consolidation program, that will work for you through one of the many credit counseling services out there. You of course would check into their reputation to make sure they are a good place to do business with. You do not want to have any problems working with one of these companies, they should be on the up and up with you.

If you are in debt, you might be interested in seeking help. The good news is that you have a lot of personal finance resources right at your fingertips. If you owe lots of money to the credit card companies, these resources can help you get out of debt. If you don’t owe any creditors right now, these resources can help ensure it says that way.
Personal Finance Software: These are software programs that you install on your PC. You can get a file to download the program from online or you can make a purchase and get the CD to install. Now, these software programs are just one of the many personal finance resources out there, but they are a great starting point. While these programs do vary, you are likely to get many features. You should basically be able to keep a balance of your checking or savings account, create a budget, get automated reminders to pay your bills, and much more.
Personal Finance Courses: The best way to education yourself on the importance of managing your finances, as well as learn how to do it is to enroll yourself in a personal finance class or course. These programs are found all across the country and some are even offered online. Basically what happens is that you get educated on important financial aspects, such as keeping a budget, making a budget, you are shown the importance of paying your bills on time, shown what to do if you do fall behind, and so forth. This is one of the best personal finance resources out there because it educates and prepares you for the future.
Professional Experts: If it comes to you getting out of debt, you are encouraged to seek help from a professional debt relief expert or a financial planner. In this case, you not only want to organize your monthly budgets, but you also need to get out of debt too. This is a lot to handle all by yourself. As just stated, this professional help can come from a financial planner, a credit counselor, a debt settler, or a professional consolidation company.In short, these are just a few of the many personal finance resources you should have available to you right now. Always remember that it is never too late to get out of debt and it is never to late to ensure you don’t succumb to it.