Credit Card Relief Vs. Credit Counseling

If you have thousands of dollars in credit card debt, then you may be looking at ways to help reduce your burden, perhaps sooner rather than later. There are two ways besides opting for personal bankruptcy that you can use to improve your financial situation: implementing a do-it-yourself credit card relief strategy or by seeking outside assistance in the form of credit counseling.

Credit Card Relief

You may be able to handle some if not all of your credit card problems yourself. For starters, decide not to use these cards again. Or, if you absolutely must have a credit card to cover certain monthly expenses, such as car insurance or cable service, then choose one that you will pay off every month.

You can also contact your credit card providers to ask about having your interest rate lowered. Many consumers find that they have trouble paying off their credit card debt because their interest charges are excessive. If your provider won't lower your rate, then seek out a card that will accept balance transfers and move your outstanding balance to the new card.

Look for a new card with no transfer fees. Bonus: choose a credit card offering a zero percent balance on transfers for six- or 12-months. Work on paying off all of your balances as soon as possible, beginning with the largest balance first.

Credit Counseling

Perhaps you've tried everything in your quest to seek credit card relief. If your problem hasn't improved or has worsened, then the services of a professional credit counselor may be needed.

Some states require credit counselors to be licensed while others have no such restrictions. When looking for help, you'll want to find someone who has a background in credit counseling whether they call themselves a certified public accountant, financial planner or similar professional. Ask for references and contact them for information.

A credit counselor may charge you fees or, if operating under the authority of a nonprofit organization or staterun department, you may be able to find help at no cost. In other situations you may be charged according to your ability to pay. Ask for a fee schedule, review all contracts, and don't sign up with anyone who promises to wipe out all debt for a fee. Your credit score can suffer tremendously if a credit counselor damages your credit while promising to repair the same.

Warnings

While personal bankruptcy may offer you some relief from your credit card debt, choosing that avenue will also ruin your credit, perhaps for many years to come. Bankruptcy should be a means of last resort, used only after all other steps have been exhausted.