According to the Index Credit Cards website, the average person has $3,752 of credit card debt, while the average household has $7,394 of credit card debt. Other debt includes student loans or personal loans. Some people find themselves burdened with debt payments, unable to escape financial trouble. Consolidating debt with the assistance of a credit counseling service offers the beleaguered consumer a variety of benefits.
One Monthly Payment
An important advantage of consolidating your debt through a credit counseling service is that you only need to make one regular payment each month. Instead of writing multiple checks or making several online payments each month, all for different amounts, one easy to track payment is made for an amount that never changes for as long as you have that debt.
Reduced Interest
Another advantage to consolidating your debt through a credit counseling service is that the credit counseling company will negotiate lower interest rates on all your debts. Counselors have established relationships with credit card companies allowing the credit counseling service to request lower rates that you could likely not negotiate yourself. The lower interest rates save you money in the long run by reducing the amount of money you pay to credit card companies and other creditors.
Waived Fees
Like reduced interest rates, credit counseling companies are able to get credit card companies to waive various fees on your accounts. These charges include late payment fees, missed payment charges or over the credit limit fees. Waiving these fees reduces your debt to the credit companies and helps you get out of debt faster. If your bills are past due, you might be charged a fee every month, so getting these fees waived is advantageous.
End in Sight
When you consolidate your debt through a credit counseling service, you are given a set monthly payment amount, as well as a schedule for when you will be out of debt, as long as you make all your payments as planned. This gives you peace of mind of knowing exactly how long it will take to be debt free. It might take a few years, possibly more, depending on how much debt you owe.
Financial Advice
Many credit counseling services also offer financial advice and guidance as part of its service. The company can help you get out of debt and give you the resources and skills necessary to ensure you never get back into debt. Your credit adviser can help you set up a budget and develop a plan to avoid falling back into old spending habits.
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