Credit Card Counseling Services
When consumers with a high debt load fear that there is no end in sight to late notices and harassing calls from creditors, they often look for some form of debt relief to get them on the road to financial stability. In many cases they run to the first program they see on a commercial or advertisement without understanding the pros and cons of what they′re getting into.
Credit counseling and credit card debt settlement are two debt relief services that consumers frequently look into, and it is important to get all the facts before committing to one or the other. The strategy you use in your search for debt relief has long-term consequences that you need to weigh carefully.
Debt Settlement And Credit Counseling – A Comparison
In a credit card debt settlement program, a trained negotiator helps you get free from your unsecured debts2 by settling with your creditors for a fraction of the amount you currently owe. It usually takes 15 to 36 months, and lets
you get on with your life faster than most other debt relief plans.
Credit counseling, on the other hand, is quite different from debt settlement:
- Unlike credit counseling services, credit card debt settlement companies do not negotiate lower rates on your total balances – they reduce the balances themselves, meaning you pay much less to free yourself from debt1.
- Debt settlement companies help you to achieve your unsecured debt relief goals much faster – in three years or less – rather than 5 to 7 years with a credit counseling service*.
- Unlike credit counseling services, debt settlement companies do not gain financially from the creditor. Credit counselors receive “donations“ from creditors, which creates a conflict of interest. In other words, if a credit counseling company can talk you into a higher rate, they may get a larger “donation“ from your creditors.
- While the credit card debt settlement process delivers a “ding“ on your credit report, credit counseling services can have a longer lasting effect since you carry balances much longer as you wait for the debt relief program to finish.
- Plus, while you are enrolled in a credit counseling service this will be reported to the credit bureaus. So if you are planning to get any type of financing, it will be difficult if not impossible since they are aware of your involvement with a debt management plan.
- Contrary to popular belief, credit counseling actually has a high failure rate – as high as 80%. Meaning as few as only 20% of people joining a credit counseling plan actually succeed. This is estimated to be due to the long–term nature of the debt relief program as well as the sense that you are still trapped in significant debt for a longer time, inching your towards debt relief at a slow pace.
What Debt Relief Option Is Most Appropriate For You?
While credit counseling services offer a “quick fix“ in the sense that they reduce your overall interest rates, they don’t necessarily guarantee you are going to get out of debt faster. In fact, by lowering your payments they may actually condition you to stay in debt far longer than you should.
Debt settlement on the other hand is a more aggressive strategy for wiping out your unsecured debt and has been used with success by thousands of people across the country.
As with any credit card debt relief solution, the answer to “What’s right for me?“ is different for every person. To find out if credit card debt settlement is right for you, give one of our trained debt settlement negotiations a call right now and get a personal consultation that will help answer your questions about debt relief.
Call 1-877-956-1500
