How can a debt counselor help me reduce my credit card debt?
Are you facing credit card debt and don’t know where or who to turn to get help with regaining control of your finances?
Debt can be daunting, so if you’re unsure of the options that are available to help you manage your debt, consulting with a professional debt counselor could be the first step toward becoming financially stable.
Is debt counseling right for me?
It may be that you have multiple credit cards that are becoming difficult to manage, so you want to explore options to consolidate your debts. Or maybe you feel like you’re not making a dent in your debt repayments as you can only make the minimum monthly payments on your credit cards each month.
If these scenarios sound familiar, it may be a good time to speak to a debt counselor to create a plan to tackle your debt.
How can a debt counselor help me manage my debt?
Initially, a reputable financial specialist will evaluate your financial situation with you. This will involve sharing details of your income and expenses, your debt, and household maintenance costs.
The analysis will take into account your personal financial goals: is there a date you want to work toward to be free from debt? Are you looking to save for your retirement or is your dream to save for your child’s college fund? It’s important to detail everything so that your individual aims can be incorporated into a structured plan.
Engaging a financial expert can give you the confidence you need to cope with your debts and to establish milestones that will help you achieve your goals. One of the most common outcomes of debt counseling is a debt management plan, which is often the best long-term strategy for reducing credit card debt.
What is a debt management plan?
Beginning a debt management plan is often the most effective option that emerges during the analysis. Your debt counselor will organize and administer the plan for you to reduce the stress that managing the plan by yourself can bring.
Debt management plans are designed to consolidate your credit card balances into one simplified repayment schedule. In order to accomplish this, a debt management advisor will work with the respective credit card companies and prepare a plan to determine a fixed monthly repayment amount. The debt management advisor can also negotiate lower interest rates, reduce late fees, and agree on a time frame in which you will repay all debts.
Having only one consolidated payment each month will make it easier to keep track of your expenses and reduce the time and stress of dealing with multiple creditors.
Sometimes it helps to just have a professional to talk to. Financial discussions with a debt advisor can help remove the headache and make you feel more positive that you can overcome your debt and move forward with financial stability.
Can only credit cards be included in debt management plans?
Debt management plans are designed to provide relief from credit cards, but most creditors have relationships in place with debt management agencies that will allow charge cards, store cards, or gas cards to be included in the program.
There may also be options to consolidate other unsecured debts into the plan, but any debt that is secured, such as a mortgage or auto loan, cannot be included. Student loans or outstanding medical bills are also exempt.
Are there any drawbacks?
A specialist debt counselor should discuss all the pros and cons of a debt management plan with you before you make a decision. For instance, it’s important to understand that once you enroll in a plan you will be unable to apply for a new credit card or continue to use your existing ones.
However, a definite benefit is that most debtors will have repaid their creditors and be debt-free after 60 monthly payments, which encourages a commitment to the plan and sets a target for a better financial future.
Talk to our trained debt counselors
Call Effective Debt Relief today at 800-940-5449 and take the first step toward becoming debt-free.