Choosing the Right Credit Counselor is Essential

Rising Credit Card Indebtedness Means a Growing Need for Debt Help

May 20, 2009

Increasing numbers of Americans, struggling with credit card debt, are faced with difficult decisions when it comes to choosing a reputable, independent debt counselor.

Despite any proposed new legislation to restrict credit card penalties, many Americans face a bleak future weighed down by debt. This applies particularly to those consumers who are unable to pay their credit card bills in full each month.

The stark reality is that consumers repaying only the minimum amount each month can be faced with a period of many years before the debt is cleared. Yet with some good, independent financial advice debts can be more easily managed and with that comes peace of mind.

Increased Credit Card Debt

Credit card debt in the US has increased by 25% in the last ten years, with delinquency rates up by more than 33% in the last three years. Americans pay $15 billion in penalty fees a year, which accounts for around 10% of the credit card industry’s revenues. Around 20% of people with credit card debt pay more than 20% in interest. (The New York Times, May 19, 2009).

Of course credit card debt is only one of many possible sources of personal debt in the US but whatever the source, there is help out there.

Debt Counseling

So, where to go for help that can offer independent and low cost or free support? A Google search using the terms “debt help” or “credit card debt advice” will reveal a bewildering array of companies offering support. Many of them should be avoided simply because they are there, not to give impartial money advice but to make money out of people’s misfortune by charging excessively for their services.

Well known financial planning and consumer credit guru Suze Orman has written extensively on debt management and debt solutions. On her website Get Out of Debt Special, she offers some valuable advice. For example, she discusses the services offered by the Consumer Credit Counseling Service (CCCS). She says CCCS are: “A non-profit corporation that looks at your financial situation… puts you on a debt management program where you pay them and they pay your creditors. The fee is usually $5-$15/month.” (http//www.suzeorman.com May 20, 2009)

Get Out of Debt

While there are many businesses offering similar advice, CCCS, part of Money Management International offers a wide range of debt advice and information on financial literacy. For people that want to get out of debt, It’s a good place to start.

Sources:

Andrew Martin, Credit Card Industry Aims to Profit From Sterling Payers, http//www.nytimes.com, May 18, 2009, accessed 20 May 2009

David Stout, Senate Passes Bill to Restrict Credit Card Practices, http//www.nytimes.com, May 19, 2009, accessed 20 May 2009

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