Reply
Regular Contributor
mgs2010
Posts: 185
Registered: ‎07-26-2009

Seeking credit counseling service for credit card debt

Does anyone know of a good, non-profit consumer credit counseling that they trust and have used? I am worried about making a payment to a company and depending on them to pay my credit card bills on time each month. Also, does this negatively impact my credit? I don't NEED consumer credit counseling but I want to do it to ensure I don't make anymore charges and actually start paying down my debts. All of my credit cards have reasonable  interest. the highest being discover with 12.24% (I owe them 2,200) and citicards 14,000 at 7.24 Variable (I rejected the rate jack to 29.99% so this account is already closed)

 

Not really sure what to do at this point. I read on here all the time I know how to manage my payments etc, but I just can't seem to put the cards away once and for all. there always seems to be "something that comes up" should I just cut the cards up and not use them at all-ever? I need to fix my situation before I end up filing BK...and i'm only 22 years old I'm overwhelmed...med bills before I had insurance really caused the majority of this credit card debt.

 

Thanks

Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007

Re: Seeking credit counseling service for credit card debt

[ Edited ]

I sent you a PM on the DMP company I used. Using a DMP company won't harm your credit after you are done with the program. They payments will be most liekly higher than you are paying now since the longest you can be in the program is 5 years.

 

Other than lowering the interest rates, the DMP company doesn't do anything you can't do yourself At the time I lacked the discipline to do it myself and the DMP forced me not to use the CCs since I couldnt if I wanted to.

Message Edited by marty56 on 01-13-2010 09:54 AM
09/12/2013 FICO: EQ: 772 EX:813 TU:752
Established Contributor
PurpleHaze
Posts: 717
Registered: ‎03-05-2008

Re: Seeking credit counseling service for credit card debt

I used a free Consumer Credit Counseling service in my city (hope stating that doesnt break the rules here - if so please let me know). However, as the previous poster stated they dont do anything you cant do yourself. They negotiate a payment plan with your creditors, you send them money, and they make the payments for you. I dont know about all CC comapnies and whomever you may have open credit with, however many of the CC cards companies automatically closed my cards when placed in the debt reduction plan. In addition, as the previous posted also stated, the counseling agency required no use of the cards as well. If your creditors close your cards, that may/may not have a negative impact to your credit because it will be reflected as closed by credit grantor.

 

You stated in your post you can't seem to put the cards away. The counseling agency will be able to "force" you do to that either. They dont make you bring the cards in, and even if you did, you could always call and get a duplicate card. If you are not able to control your urges, then the only to do is cut up the cards to avoid usage, but you dont learn anything from that (eg. building credit, being financially responsible, etc).

 

In my humble opinion, use self discipline and contact your creditors directly to make a payment plan.


Starting Score: EQ: 633 (12/31/09) TU: 651 (12/31/09)
Current Score: EQ:633 TU: 651
Goal Score: EQ: 700 TU:700


Take the FICO Fitness Challenge
Valued Contributor
Jazzzy
Posts: 2,678
Registered: ‎07-29-2009

Re: Seeking credit counseling service for credit card debt


PurpleHaze wrote:

I used a free Consumer Credit Counseling service in my city (hope stating that doesnt break the rules here - if so please let me know). However, as the previous poster stated they dont do anything you cant do yourself. They negotiate a payment plan with your creditors, you send them money, and they make the payments for you. I dont know about all CC comapnies and whomever you may have open credit with, however many of the CC cards companies automatically closed my cards when placed in the debt reduction plan. In addition, as the previous posted also stated, the counseling agency required no use of the cards as well. If your creditors close your cards, that may/may not have a negative impact to your credit because it will be reflected as closed by credit grantor.

 

You stated in your post you can't seem to put the cards away. The counseling agency will be able to "force" you do to that either. They dont make you bring the cards in, and even if you did, you could always call and get a duplicate card. If you are not able to control your urges, then the only to do is cut up the cards to avoid usage, but you dont learn anything from that (eg. building credit, being financially responsible, etc).

 

In my humble opinion, use self discipline and contact your creditors directly to make a payment plan.


Cutting up your cards may be a good first step. Does it keep you from using credit cards? No...because you can always get duplicates. If you don't think you can control your credit card spending, then you need to actually close the accounts.

 

By contacting your creditors directly to make a plan, as soon as you tell them you are having trouble making payments, some of them may close the accounts anyway.

Member
shrekonion
Posts: 6
Registered: ‎01-14-2010

Re: Seeking credit counseling service for credit card debt

I participate in consumer credit counceling agency's debt-management plan.  Started 2.5 years ago, when I realized I couldn't put a dent in my debts with Chase and Providian's high interest rates. I've first talked to Chase and Providian directly, telling them that I couldn't afford a minimum payment (total debt on those cards was about 20K); "nothing we can do for you". I wasn't late on any payments, maybe that's why they were unwilling to help. I set-up a plan with counceling agency; they've negotiated interest rates decrease from 17-18% to 6% (Providian still got 10%).  My monthly payment for 3 cards is $405; more than I would have been paying, but I was OK with the amount because I really despised the cards.  Closed the accounts myself. Also, I did get to keep a couple of cards. I'm supposed to be free of those cards' debt this coming October-November.

 

If you are worried about trusting the company to tak your money and disburse it to your creditors, I can tell you that I haven't had a single incedent so far. You might need to change your payment due dates with credit cards, since the counceling agency withdraws funds from your bank account either on 1st or 15th of each month (at least, these were my only options 2.5 years ago), and disburses the funds to creditors in 7 days.

 

prior to enrolling, I've heard participating can negatively affect your score, but I guess I didn't care much about the score; being free of debt appealed more. One of the accounts in counceling (Providian) does show up as negative on credit report (Transunion and Equifax, I think; Experian doesn't count it as negative), with something like "consumer participates in debt-management program" wording.

 

If my advice is worth anything, I'd say pay off your debts yourself - I would have for sure, if my cards' interest rates weren't bad.  As you state, you do not NEED the counceling; your interest rates are great. It's all mental; you'll need to "wise" up (at 22, I wouldn't have been there either, so it's not a question of intellect or abilities) and realize that "something comes up" is not a real issue. It only seems to you that you need to pay for these "somethings" with credit cards; you really don't need to.  I've put away my cards; if something comes up, I just tell myself that it's not a big issue, that I can pay it off with bank account's money, even if it takes a bit longer.

Valued Contributor
Jazzzy
Posts: 2,678
Registered: ‎07-29-2009

Re: Seeking credit counseling service for credit card debt


shrekonion wrote:

I participate in consumer credit counceling agency's debt-management plan.  Started 2.5 years ago, when I realized I couldn't put a dent in my debts with Chase and Providian's high interest rates. I've first talked to Chase and Providian directly, telling them that I couldn't afford a minimum payment (total debt on those cards was about 20K); "nothing we can do for you". I wasn't late on any payments, maybe that's why they were unwilling to help. I set-up a plan with counceling agency; they've negotiated interest rates decrease from 17-18% to 6% (Providian still got 10%).  My monthly payment for 3 cards is $405; more than I would have been paying, but I was OK with the amount because I really despised the cards.  Closed the accounts myself. Also, I did get to keep a couple of cards. I'm supposed to be free of those cards' debt this coming October-November.

 

If you are worried about trusting the company to tak your money and disburse it to your creditors, I can tell you that I haven't had a single incedent so far. You might need to change your payment due dates with credit cards, since the counceling agency withdraws funds from your bank account either on 1st or 15th of each month (at least, these were my only options 2.5 years ago), and disburses the funds to creditors in 7 days.

 

prior to enrolling, I've heard participating can negatively affect your score, but I guess I didn't care much about the score; being free of debt appealed more. One of the accounts in counceling (Providian) does show up as negative on credit report (Transunion and Equifax, I think; Experian doesn't count it as negative), with something like "consumer participates in debt-management program" wording.

 

If my advice is worth anything, I'd say pay off your debts yourself - I would have for sure, if my cards' interest rates weren't bad.  As you state, you do not NEED the counceling; your interest rates are great. It's all mental; you'll need to "wise" up (at 22, I wouldn't have been there either, so it's not a question of intellect or abilities) and realize that "something comes up" is not a real issue. It only seems to you that you need to pay for these "somethings" with credit cards; you really don't need to.  I've put away my cards; if something comes up, I just tell myself that it's not a big issue, that I can pay it off with bank account's money, even if it takes a bit longer.


 

Hi...and welcome to the forums.

 

Thanks for giving us the rundown on your debt management experience. It looks as if you've learned a lot from the experience...as well as a lot about yourself.

 

You're on the right track...and thanks for sharing.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+