Credit cards are usually responsible for a lot of the damage for people who get into debt problems. They are easy to obtain, easy to use and before you know it, you can easily have $25’0000+ in credit card debt alone, spread over numerous cards!
Because this kind of debt is so common, “credit card reduction services” have been developed, where an expert helps you reduce the amount of debt on those cards. The services are becoming increasingly popular, but you may need to do some research before signing up with a company who are going to help you manage credit card debt.
Firstly you need to analyse what can be done with your credit card debt – for example, can you simply obtain a personal loan to cover the debt or do you have other debt and are unable to consolidate credit card debt? Determining the extent of your problem helps you select the right organization for credit card reduction services.
Also you need to make sure that the company you choose for credit card reduction services is a reputable one. There have been stories of companies that simply roll the credit card debt into a large loan which still has a massive interest rate. Shaving off 1-2% from your credit card debt is better than nothing but rolling it into an expensive personal loan is not always the best option. Some companies receive bonuses for getting people to sign up to these expensive personal loans with high interest rates and unfair conditions.
Look for reviews of the company online. If they are a reputable company offering a great service, there should be other users who have had a great experience with the company. There are also websites online offering detailed consumer reviews of various companies. If you have friends who have been through the process, ask them if they would recommend the company they used. Use debt reduction forums to find recommendations for credit card reduction services – that is the best place to find honest reviews and real life experiences.
Some companies will only offer specific services, for example debt consolidation loans. Whilst others will also offer debt counseling and debt repair services. Often to minimize cost, it’s best to find a company that does a mix of those services, so you only get charged once for their help.
Some companies will be better at getting you a lower rate on your credit cards, while other companies will immediately seek to destroy most of your cards and roll the debt into a single loan. It’s best to sound out exactly what services the company offers upfront, so you know what to expect during the service.
If you need help setting up a personal budget, let them know, if you just want to close the credit cards and move to a cheaper loan, specify that. The company can let you know if they provide those services.
Some companies work on a performance basis – they take a percentage of the money they save you by consolidating your credit card debt. Others earn commissions by signing you up to loans, so be careful of those guys – read the fine print of the loan. Companies that specialise in debt counseling and take the time to get to know your finances and debt, will often charge an upfront fee because more work is involved.
If you are unsure that the company you are working with is reputable, check their performance regularly. If they say they are going to pay a creditor, make sure the payment makes it through to that creditor. While most credit card reduction services are honest and reliable, there are some that are not – use your common sense and be careful!