In a bad economy, it’s getting pretty easy to become overloaded with credit card debt. You aren’t necessarily a shopaholic and you aren’t necessarily buying items that you don’t need. In an economy like we have today, families are finding it necessary to use credit cards for things they never would have needed to or considered perhaps a year ago. When groceries were paid for in cash, they now are added to a credit card. Even your morning coffee might need to be charged. When monthly statements become overwhelming and almost impossible to pay, consolidated credit counseling might be the only answer.
Consolidating credit is nothing more than including all your monthly bills into one payment and then in turn paying a service to pay your bills. A reliable service will do this as you freeze your accounts and allow a professional to manage your bills. This might be your last chance of recovery before being forced into bankruptcy.
First, check out some local non profit agencies that specialize in this kind of credit counseling. Many companies exist, especially online. Do your research, though. The thought of having all your bills lowered and consolidated is sometimes such a driving force that many consumers end up signing on with companies that do thing more than cause further problems.
One of the scams involves companies that actually do absolutely nothing for you. These are usually online sites that have very professional looking information, testimonials from supposed clients, and lots of disclosure information about what they do and how this could affect your credit – all things one would expect to see in a legitimate business of this nature.
However, what they do is take your money and run. They simply take your application, perhaps communicate via email or even a few phone calls, wait an appreciate period of time, and then tell you everything has been fixed. They then give you a new figure for what your monthly payment will be, and you are instructed to send them this money.
Your assumption of course is that your monthly payment to them will be appropriately dispersed to your creditors with whom this credit agency has supposedly been negotiating regarding lowering your payments. The truth is that this company hasn’t done a thing for you! No one has called your creditors, and no one has paid your bills. And by the time you find this out and start asking questions, the company has changed websites and names and can’t be tracked down.
In a few months you will find that your creditors start calling asking when you plan on paying your overdue bills! When you explain your situation, this is when you are told they have no new agreements with you or any of your representatives.
On top of that, you are now being penalized with a higher APR because you have defaulted! Be careful who you ask for help!
Read Additional Facts on Consolidated Credit Counseling at Consolidated Credit Counseling Information and Consolidated Credit Counseling Services