Consumer Counseling

American household decision makers who’ve just recently noticed the negative direction of their domestic receipts have turned to consumer counseling companies in droves to attempt to reverse the trend. Credit card bills and other unsecured debt accounts have become such an absolute menace for so many families that a debt relief program like consumer counseling may seem like a small miracle, and, admittedly, consumer counseling firms do boast several aspects that should appeal to harried citizens. With most of the consumer counseling systems, a monthly payment will be made to the consumer counseling firm that in turn will be distributed among the various creditors whom the consumer counseling firm has already contacted. The singular payment system of consumer counseling alone should ease the tensions of heads of household constantly worrying over various due dates and seemingly trying to eke out minimum payment every other day. Furthermore, the option provided by consumer counseling companies should also feature interest rates several points below those of the credit cards.

However, while the consumer counseling approach may appear to simplify so many of the borrowers’ issues, the potential clients of any such technique should also be aware of all of the faults inherent in the consumer counseling plans. So great are the downsides that, in fact, a high percentage of enrollees end up dropping out of consumer counseling programs within the first few years despite their early appreciation for the tactics as glorified by the consumer counseling salesperson with whom they initially consulted. According to most of the respondents that were formerly admitted to consumer counseling programs only to find the actual supposed solution lacking in results, little or no relief is actually provided for the debtors already going under from the amount of their monthly expenses. While the interest rates of the unsecured credit card debts may be reduced through consumer counseling, the required monthly payment could actually be proportionately larger.

Much as the single payments of consumer counseling strategies may save on stamps, this hardly aids cash strapped families struggling to make ends meet on a limited budget, but, by the time that borrowers realize that the consumer counseling program isn’t of any significant benefit, they may have no other option available. As soon as the debtors register within the consumer counseling program, the borrower’s decision will then be reported to the three main credit bureaus, and this notation of consumer counseling will almost always negatively affect the borrowers’ future potential for obtaining loans (or even, depending upon the particular circumstances, employment opportunities).

Looking at consumer credit counseling as a whole, it’s difficult to understand why the consumer counseling strategy has become so popular, but one should not discount the influence of the consumer counseling industry’s well funded advertising campaigns. Many American citizens remain unaware that most of the consumer counseling firms have been funded by the creditors themselves in order to ensure that the credit card companies and other lenders can exploit the potential for maximizing the collection of high interest payments for as long as the debts exist. Frankly, for the average debtor, something like settlement negotiation which directly nudges down not just the interest rates of credit card accounts but also the balances owed should make a great deal more sense. Settlement negotiation has not yet reached the public awareness of consumer counseling, but, as more and more Americans learn the truth about the consumer counseling scheme, this shall surely change.

The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.

Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?

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