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Living paycheck to paycheck? Worried about debt collectors? Can’t seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider the services of a credit counselor. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware - just because an organization says it is "nonprofit" doesn’t guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make "voluntary" contributions that cause them to fall deeper into debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
If you possess one or more credit cards and find that you cannot meet the payments, like many consumers, you need to consider the benefits of a consumer credit counseling services. The longer the payment is outstanding, the more you will accrue in, often expensive, late payment fees and high interest. You are not alone; many people find themselves in this position. According to The United States Census Bureau, 28% of credit card holders almost never met their payments in 1997 and it is believed that the situation is getting worse.
You need to take control of your financial commitments. Consumer credit counseling services are designed to help you assess and improve your use of credit. Part of the process is to review the terms of your current credit cards such as the interest rate and late payment penalties. Credit counseling will suggest ways to reduce your financial burden, and ensure that you do not slip back into debt.
If you decide to work with a debt negotiation company, be sure to check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau. They can tell you if any consumer complaints are on file about the firm you’re considering doing business with. Also, ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is.