Debtors must go in for credit card counseling

The most common source of debt is credit card spending. Credit cards offer you ease of spending but charge very high interest rates. What’s more the interest meter starts ticking from the moment you make a purchase. This means that you are sitting on a potential time bomb whenever you miss a payment. The only way to defuse such a crisis is to follow stern financial discipline or to go in for credit card counseling.

There’s a common misconception that you can pay a credit card company only once a month. The truth is you can pay them as many times as you like. So pay as often as you can, preferably once a week. Weekly payments mean that that you pay less interest because your balance goes down with every payment. It is also easier to make small, weekly payments than a single, large one.

However, if you are in serious trouble with your credit card payments then you can always approach organizations like the Consumer Counseling Centre of America. CCCA is one of many non-profit organizations that are present all over the US. These organizations help people to get out of unsecured debts like credit cards, personal loans, and medical bills.

CCCA is very different from a consolidation loan agency in that CCCA does not give loans. What they do for you is simply consolidate your debt for you, and negotiate better interest rates with your creditors.

CCCA takes a monthly payment from you and then pays off various creditors from that amount. When you participate in a CCCA or any other similar non-profit program you gain in terms of peace of mind. Creditors stop harassing you, your accounts stay updated and your payment, current. What’s more, since all the payment logistics are being handled by someone else, there are no misses and therefore no late fees or delinquency charges.

Sometimes people feel upset when their request for a debt consolidation loan is rejected by banks or financial institutions. They must realize that credit card debt is an unsecured loan and is not attached to any collateral. Most institutions will therefore ask you to mortgage an asset such as a house. This is not advisable because if there is a default then the bank will auction the house.

So your best bet out of any credit card induced financial crisis is plenty of self discipline and a little help from a counseling company.