Posts Tagged ‘affordable credit counseling services’

Three Things You Must Know About Consumer Credit Counseling Services

If your personal debt is growing fast, where you owe different amount of money to multiple creditors, you must be having great difficulty in managing your finances. Consumer credit counseling services can help you in these situations. Through their , they can show you the way on how to get your finances back on track. However, you have to be very careful while you use these services. Following are the three things that you need to keep in mind.

Unfair Business Practices

It is very important for you to keep in mind that not all agencies are genuine ones. There are several unscrupulous companies also available out there. That is the reason you are strongly recommended to check with the local consumer protection agencies or the Better Business Bureau (BBB) and find out if the service you are considering signing up for is reputable. You can check the background records of the companies through BBB to ensure that they are legitimate and genuine. You must be wary of those that have lots of complaints against them. If a counselor is forcing you to make decision, it should be taken as an alert sign. For example, you need to make sure that your creditors have approved the proposed debt management program before you start making the payment toward the same. Always remember, fair business practices mean the entire process must be completely transparent.

The Cost Of Additional Services

When you enroll in a debt management plan (DMP), you may be asked to pay certain fees. For example, you may be charged an initiation fee for opening your account. Besides that, most agencies also charge a certain amount of money per month as administration fee. The monthly fee is usually around 10% of the total debt, but as per laws applicable in these cases, no agency can charge you more than $50 per month for consumer credit counseling services.

Hidden Costs Involved With A Non-Profit Agency

Many counseling agencies advertise themselves as non-profit organizations. But, it is important for you to keep in mind that just because they have a “non-profit” logo with their company, it does not mean that all their services are free. The term non-profit means the agency is not making any profit by offering these services; they may still charge fees in terms of administration or processing charges. This way, the services offered by non-profit organizations may also turn out to be very expensive, something that you may not be able to afford. In fact, as per the U.S. Federal Trade Commission (FTC), just having the “non-profit” tag does not even make a company legitimate. Therefore, you are strongly recommended to do a thorough background check before you sign up for just any debt management program.

Overall, when it comes to making the best use of the legitimate and result-oriented consumer credit counseling services, your awareness plays the key role. If you keep in mind the above three things, you will definitely be able to make an informed decision.


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