Credit Counseling Services ? What Are They and How Will They ...

The demand for credit counseling services is booming with the recent economic recession. Credit card debt has soared to a record of 1 trillion dollars. As the economy begins to regain strength credit counseling services are receiving more business from the many Americans that are still struggling.

These services may be capable of repairing your dept to some extent. Yet with the credit counseling services being a $7 Billion a year industry, how do you know if they are legitimate businesses or a scam?

With the increase in availability of credit cards, and the vast number of consumers that have taken to their use, it is not wonder that so many services have begun to appear. There are now over one thousand credit counseling services that service nearly 400,000 consumers. This problem will continue to escalate as new legislation has cause many major credit card providers to increase their interest rates.

These increased interest rates will make it more difficult, and possibly impossible, for the already struggling consumers to handle their credit card debt. As more and more people begin to struggle, the credit counseling services will begin to increase in popularity amongst consumers.

As more consumers begin to move towards declaring bankruptcy, credit providers will be forced to be more willing to negotiate, as the declaration of bankruptcy would leave them with nothing.

These companies are meant to thrive upon this new codependent relationship that the banks have with consumers. Without the banks willingness to negotiate, these companies would have no business.

These customers using the credit counseling services will normally go into business working with their own personal counselor. These counselors will not only work to negotiate terms with the banks but also to inform the customer of how better to avoid future problems.

Once the debtor has entered into one of these credit counseling services all of their previous bills are summed up into one monthly payment. This is then handled by the service and distributed out to the different creditors as needed.

However, during this time the debtor is effectively shut off from receiving anymore credit. This closed line of credit will be kept for the entirety of the program which can take roughly four to five years.

These services can provide many phenomenal benefits to struggling consumers, and can relieve much of the stress that is accompanied by debt trouble. However, even more stress can be created if you begin to deal with an illegitimate business.

With the recent increase in credit problems many start ups have been created in order to capitalize on the new emerging trends. These new companies were excellent advertisers in comparison to the already dominating Consumer Credit Counseling Services, but not all were as legitimate.

These companies are supposed to work with creditors to negotiate payment plans and reduce interest rates to help out those in debt.

Some of these illegitimate businesses would charge fees, to the tune of $3000 dollars, claiming that they would settle your debt.

However, these companies would often use the money to attempt and settle multiple debts, not just the customers, which would often lead to them owing substantially more money. Therefore it is a good idea to check with the Better Business Bureau before working with any of these credit counseling services /companies.

For the most part a legitimate company will not make you spend exorbitant fees to set up an account with them. As another sign of legitimacy you should also check to see if they are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Even then if there are missing payments within the first few months, you have probably begun business with an illegitimate credit counseling service, and should immediately stop doing business with them.

Find more ways to solve your personal debt problems in http://www.SolvingDebts.com.

Get simple and powerful tips about debt settlement, that can potentially save you thousands of dollars in the process.

Content About : Credit Counseling Services ? What Are They and How Will They Help You to Manage Your Debts? Article

-- Download Credit Counseling Services - What Are They and How Will They Help You to Manage Your Debts? as PDF --

new mexico state kevin rose sessions march madness scores doonesbury padma lakshmi daughtry