Consolidating Your Credit Card Debts with Help of an Agency

Credit Card Debts

Most of the people nowadays suffer from paying debts and frustrated by high interest credit card balance. You can get debt relief from the following three options: debt management plans & debt settlement, student loan consolidation and debt consolidation loans. This consolidation of debts can lower your interest rates and monthly payments, protection of credit rating and helps in get rid of debts faster. In order to cope with overwhelming debts you can seek credit counseling agencies who offer debt consolidation programs to get debt relief.

The agency is a third party payer. With help of debt management plan, you pay single amount to the credit counseling agency who will distribute your money to creditors until the full amounts were paid. Be careful in choosing the best agencies and choose a nonprofit credit counseling organization which belongs to either NFCC or AICCCA.

Its member agencies will pass strict standards set forth by the “council on accreditation for children and family service” and their counselors will pass a certification program. Even though agencies are member for such organizations, be choosy. The agency should be well organized, sending statements and payments on time and offering education & strong support to the consumers. In case of poor services, you can contact another branch.

All the agencies structural plans are same, only the agency and employees will vary. The counselor will determine the time taken to settle the amount to your creditors within 3 to 5 years. The payment is around 2.5% of the total debt. The NFCC spokesman have told that they have negotiated with top ten credit card issuers to reduce the monthly payment lower than 1.75% and reducing down the interest rates to meet 5 years repayment time frame. If you have extra money, you can stop the plan anytime, settle the payments and get rid of debt faster.

Monitoring your monthly account payments and statements

The counselor will assess your entire financial situation. From the cash that left over by subtracting the monthly expenses from income, the counselor will present the consolidation along with other options. Debt consolidation is not advisable for everyone; it’s only for the people who have unsecured debts.

When you have started to follow the plan, don’t wonder how much money you should pay monthly, the amount remain the same. Keep track of the monthly statements sent by the credit card issuer and agency whether the payments are settled correctly. The agency holds an strong agreement with the consumer that is until the account are closed or free from debts, you should never buy new ones. Consolidation is a not like a bankruptcy but it’s a kind off.

The consolidation is not taken into credit score but many creditors indicate that your payment process is through third party. It shows red dots when your reports are viewed by anyone else. Consolidating debts through an agency may be helpful but you can achieve the same result when you do some plans. Monthly you can save large amount by sacrificing many unwanted expenses.

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