Consumer Credit Counseling Service

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I have approximately $2000 of credit card debt that I absolutely need to get paid down. i talked to consumer credit counseling services, a debt consolidation company, http://www.cccsstl.org/ and this is what i was told: Basically they would cut my payments down to about $130 a month total for 3 cards by getting my interest rates lowered to between 6 and 10% approximately. I would pay it off in 2 years instead of 8 as i would now without consolidating. he said the $130 a month payment included a monthly fee of $49 directly to the credit counseling service for their help and services. Is that the normal thing when consolidating? Is that legitamet? I would only be paying $80 or so a month on the actual credit card debt and that doesn't seem like very much to me. Anyone have any knowledge in this area? Is consolidating a smart thing to do and does it hurt your credit in any way? Is there a smarter way to do it? LONG-sorry and thanks!

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Don't touch it! Instead go to www.daveramsey.com He is a financial giant. Great advice there. Read Financial Peace , Total Money Makeover both by Dave Ramsey.

i have got into debt through credit cards, catalogues, store cards and personal loans. would i be better getting a consolidation loan or having the consumer credit counselling service act on my behalf?

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You could try the Citizens Advice Bureau. They have fully trained debt advisors and their service is free.

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Most Credit counseling agencies list themselves as 501c non-profit groups. They do, however charge fees for their services. the IRS recently conducted an audit of the largest ccc's in the nation and revoked their non-profit status because they found they were not performing the services they were supposed to provide to qualify as non profit groups. The IRS indicated that they expected to revoke the non-profit status of the majority of these agencies when their audit is completed. Many of these agencies are actually owned by the credit card companies themselves! They simply act as collection agencies for the card companies! Those that arent owned outright by the Credit Card Companies work under a revenue sharing agreement. For every dollar they get from you, they also get a matching amount from the Credit Card Company. So it benefits them to keep you paying that balance off over as long a period as possible. While they may be able to get the cards interest reduced or suspended for a period of time, you still pay the full balance owed, plus their monthly fee! So you dont really reduce your monthly outgo by that much, and 50 percent of people who enter these programs fail to get through the whole process. I would recommend Debt Settlement as a better alternative. In Settlement your creditors are offered a percentage of the balance as settlement in full. That settlement is usually in the range of half the balance! You are finished with the program much faster, for much less. the only real downside to this approach is that any card enrolled in a settlement program will be de-activated. But if you cant keep up with the minimums now..that would probably be a blessing!

Has anyone used a credit consolidation company? I am seriously considering using one that has a good reputation, but I was told that I will have to close out ALL of the credit cards that are on the repayment with them!!! For anyone who may know anyway, will closing out all of my credit cards (with maxed out credit limits!) adversely affect my credit rating?? I know it will, but to what extent?? Thank you for any advice.

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It will show on your credit file that U are in counseling but it also shows U may have got in over Ur head but have made arrangements to resolve Ur situation. U will not be able to use the credit cards that U include in the service(keeping 1 out for emergencies is a good idea) but they are also being paid on.At least U are making an effort to correct Ur circumstances and not filing bankruptcy. For everything that is included the company of your choosing will contact all of the Co's, get rates reduced in turn reducing payments and sometimes getting excess charges removed completely.I wish U the best-In the long run Ur credit will be better off this way than defaulting or file for bankruptcy.

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yes it will