Feeling overwhelmed by debt and monthly bills is not an unfamiliar experience to the average American. Fortunately, there are places you can get professional credit counseling to help you get your finances under control and become debt-free. However, many people do not know the signs that indicate that they would benefit from professional credit counseling.
Minimum Payments
If you are only making the minimum payments on your debt, either because that's all you can afford or you are spending the rest of your disposable income on non-essentials, then credit counseling is definitely for you. According to MSN Money, paying only the minimum payment on a card with $1,000 will take you 22 years to pay off and thousands of dollars in interest. Credit counseling will aid you in getting off the minimum payment merry-go-round of interest rate payments and onto the path to becoming debt-free.
Blind Spending
When you do not know how much money you owe on each card, let alone the grand total, it's time to involve a professional. Knowing how much you owe as well as your interest rates not only helps keep your spending within reason, but it gives you the knowledge necessary to improve your financial situation if you choose to take responsibility for it.
20 Percent Rule
If you are spending more than 20 percent of your take-home pay each month on paying off your debt, yet you aren't really making much of a dent, you need professional credit counseling. Not only can a professional credit counselor work out a doable budget with you, but sometimes they can negotiate lower interest rates and waived fees with your creditors through a debt-management plan (DMP).
Charging Necessities
Charging necessities due to cash flow problems, loss of a job or no emergency savings is a red flag that indicates you need professional credit counseling. A credit counselor will help you take an honest assessment of your financial situation, both your income and your monthly expenses, to give you a functional budget that moves you in the right direction. In cases of temporary financial hardship, your credit counselor may be able to negotiate a temporary suspension of payments without penalties with your creditors.
You Feel Overwhelmed
Feeling overwhelmed or hopeless about improving your financial situation is a sure sign that you would benefit from credit counseling. According to the National Foundation for Credit Counseling, credit counselors advise, educate and enable you to take control of your budget, debt and financial future through counseling sessions, classes and literature. Trust your gut if you're feeling like you're drowning in debt, and get the help you need from professionals who can guide you to a better place financially.
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