Will Credit Counseling Work for You?

“Cut Your Payments in Half!” or “Consolidate Your Bills into One Low Monthly Payment!”

Will Credit Counseling Work for You?

We all have seen these ads and when you see ads like these, most likely they are from a Credit Counseling firm. Let’s investigate the basis or principles behind this Credit Counseling approach and reveal the main problems most consumers face when they ultimately enroll in one of these programs.

The common term “Credit Counseling” is really misleading, since it has absolutely nothing to do with the preservation or credit score improvement. In reality, most Credit Counseling will certainly damage your credit if precautions are not taken. This single unpleasant fact is downplayed by most in the industry.

Credit Counseling is debt management. These are programs that are designed to have you make a monthly payment to an agency and then the agency redistributes your money to creditors you are behind with on your behalf. Hopefully, at a lower interest rate using an agency, all in order to pay off the debt much faster. Credit Counseling should never be construed as Debt Consolidation, Debt Settlements, or Termination of Debt. Each of those types of debt methods take a very different approach in resolution opposed to straight Credit Counseling.

With the available options at your disposal today, Credit Counseling is by far the most popular in the USA with millions of Americans on these programs.

Is this the end all solution if you are struggling with debt ?
No! Let’s look deeper at the numerous problems within this method.

In the past 10 years, the Credit Counseling industry has been the target of criticism by many pro consumer groups such as the Consumer Federation of America. However, these critics often are off the mark entirely. With a laser focus on the overly aggressive companies that utilize their 501(c)(3) non-profit status to lure consumers into believing they are a charitable organization, or possibly their services are offered free of charge. No way, these posers charge hefty so called “voluntary” contributions. Many times these add up to hundreds of dollars for the consumer, plus high monthly maintenance fees as well.

So let’s take an insider journey on how Credit Counseling actually works. For instance, someone might owe $30,000 with different credit card lenders. We also need to make the assumption the average interest rate prior to enrolling was at approximately 24% (which is actually low these days considering there are credit card bandits charging 49% per month out of North Dakota). If your minimum monthly payments have been $500, which you’ve been struggling to keep up with. At this rate, it will take a whopping 160 months (more than 13 years) to pay off your card debt, this is under the assumption you do not miss another payment.

So you enrolled in a Credit Counseling program with the hopes and promises that you will get of debt faster. But will you? This is only if your creditors agree to work with you in their program (many time this is not the case), your goal really should be in a reduction in your interest rates. Prior to this year, some creditors really liked using Credit Counseling to keep their collections ongoing and they offered very good concessions on their normal interest rates to get you back in the system. But currently they creditors are no longer participating like in the past due to being pressured into concessions and only to have the card holder default one again.

Credit Counseling part 1

Finding Credit Cards For People With Bad Credit

Finding Credit Cards For People With Bad Credit

Credit cards for bad credit. Finding the best credit deals with poor to bad credit is tough and may be, these are the only credit cards for people with bad credit might be the only cards you qualify for. Option are limited and the interest on credit cards for people with bad credit your will find are up to 200% higher than on a regular credit card issuance. These credit cards have been specially designed for those individuals with a bad credit history and can not qualify for a standard credit card. If you are trying to build credit, in school or your first credit, or possibly circumstances have arisen that has negatively impacted your credit history and in these cases you normally qualify for this type of credit cards for bad credit.

Bad Credit Deals – Do they exist?

With bad credit, credit card deals are found online without a lot of effort doing a simple search for bad credit or fully secured cards. These lenders will divide bad credit cards into “fully secured credit cards” for bad credit that need a deposit and “unsecured credit cards”, either way both come with much higher fees. They do offer people with a poor credit scores or those without a previous credit history a fairly quick and easy way to regain a new good credit history using the bad credit cards as a tool. If you keep your credit balance under the limit along with making your payments on time, you will become eligible for new offers that have better low interest card rates and will improve your credit score also. Your best move is to start immediately correcting your bad credit with dispute letters (Credit Mastery – Business Credit – Personal Credit book has several great letters to challenge the reporting lenders and credit reporting agencies to improve your score).

Interest rates  – Finding Credit Cards For People With Bad Credit

Temptations seem to be endless when having credit cards and if you try to use bad credit cards to get you through a tight situation, keep in mind this is only a temporary solution as the interest rates on these credit cards are extremely high and you may just be digging a new hole! It is best to shop around and find credit cards for bad credit with an interest rate that you can live with. If you are one of those people who are constantly rolling over balances from month to month you probably already know the single most important part of picking credit cards is the interest rate in this case.


Credit cards for bad credit are very easy to misuse, so don’t go crazy as soon as they arrive, they are not a lottery ticket! If you find yourself going a bit overboard there is a good chance you just put yourself in a much worse situation. Secondly, do not apply for every bad credit card offer your see, as this does affect your 10% of your credit score for the inquiry, so only choose two credit card deals you find. After six months you can venture into another two cards.

Click here for Finding Credit Cards For People With Bad Credit