Credit counseling is a viable option for those who are feeling the stress of being overwhelmed by debt. Credit counseling primarily offers assistance with working out a credit and debt repayment plan for an individual to gain control of their finances by creating a structured budget for an individual to follow. Credit counseling offers an individual the option to repay their debts, if needed, through a credit counseling debt repayment program. This is where the credit counseling organization becomes in contact with an individuals creditor to ask for lowered interest rates and for the credit provider to stop any late and over the limit fees that may be attached to a particular credit card. Credit counseling organizations that provide a no charge credit and money management education program for an individual typically have the individual consumer’s best interest on their mind.

Credit counseling may be needed if the following signs are present:

1. Are you using more and more of your income to pay your debts?
This becomes a problem if you are at the point where the money going out is less than or nearly less than the money coming in. Credit counseling would be a wise choice. Speaking to a credit counseling organization at this point can help because in a counseling session you may find that by sticking to a sound budget you may be able to avoid additional help. The best part is the counseling sessions should be at no charge, make sure of that before speaking to an agency.

2. Do you make only the minimum payments due on your loans and credit cards each month?
Look at your budget, that is review what dollars are coming in and how those dollars are going out. You may find that by tweaking your budget you may be able to avoid credit counseling by implementing a plan of savings through following your own plan. This should allow you to free up more money to be more aggressive in repaying your debt. Credit counseling may be needed if you have reviewed your budget and can’t find additional funds to pay more than the minimum amounts to your credit cards. Paying only the minimum to your credit cards will only prolong the length of time needed to repay your debt. Some credit cards may charge such a high interest rate that it could take years upon years to pay off with minimum payments.

3. Are you near, at, or over the credit limit on your credit cards?
Once a credit card is nearing it’s available balance or even worse if the credit card is over it’s credit limit it is time to take aggressive action to pay down the balance. If this is a situation you are finding yourself in try finding additional dollars to bring your balances down. It is recommended that when doping this you do not open another credit account or take a consolidation loan to repay these accounts as more often than not taking a loan to pay a loan will result in more debt being owed. If you can’t find the dollars to apply towards the credit cards try speaking to a credit counseling organization. They may be able to lay out

4. Are you paying your bills with money intended for other things?
If you find yourself “robbing Peter to pay Paul” with your credit cards it may be acceptable if you are replacing the dollars that are going to unnecessary items such as cable TV., cell phone payments…etc. Just as long as those accounts have been paid and you are not accruing any more fees from them. However if you find yourself using dollars that are intended for necessary items such as a car payment, a house loan, food, etc. then you are most likely in a situation where credit counseling is an option you may need to look into. Look at speaking to a certified credit counselor that will offer a solution to your financial needs. Getting out of the red is very important, the sooner you take action the better.

5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
This can be very problematic when you are utilizing your credit to purchase things like groceries, fuel or other disposable goods. If you are currently in the act of doing this review your finances to determine if you can avoid making these purchases with your credit. If this can’t be avoided try speaking to a credit counseling organization. They should be able to give you the tools needed to avoid this costly practice.

6. Do you often pay your bills late?
There are a few reasons on why an individual may frequently pay their bills after the due date. One of the main reasons is that there isn’t a budget in place to follow, therefore rendering the payments of the debt to the instance of when a person gets paid. If a payment is due on the 25th and a individual is paid on the 30th this typically develops into a past due payment. This is due to the fact that the majority of people live from one paycheck to the next. Creating a savings account and a budget plan will resolve this issue for the most part. Paying bills late on a regular basis may also be attributed to an individual being upside down with their debts, meaning that there is more money going out regularly than coming in. Once this point is reached it may be time to speak to a credit counseling organization. It is urgent to seek help at this point in order to order to avoid long lasting damage to your credit.

Regardless of your situation it is important to seek help when feeling the pinch of being upside down or behind with your finances. Taking measures early will result in less dollars that go out in the long run. Taking action early will also result in a lesser need of bankruptcy which has long lasting negative impact on your credit worthiness.

Rick Munster lives in Boise, ID where he works as the Media Planner for Debt Reduction Services, http://www.debtreductionservices.com. When he's not busy working with the media he enjoys writing, or getting away to do a little fishing.

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