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Thanks to recent legislation, credit card companies are now required to print a toll free phone number for non-profit credit counseling on your credit card bills. Wall Street Journal writer, Karen Blumenthal, notes that although non-profit debt help agencies often receive funding from credit card companies, they offer services more likely to help consumers with resolving debt issues. Recent data suggests that consumers are either getting a clue and not carrying credit card debt, or are paying down their existing balances. The Federal Reserve reports that consumer revolving  debt fell from $935 billion in the first quarter of 2009 to $853 billion during the first quarter of this year. Credit counseling professionals report that debt problems affect consumers in all income ranges; whether you’re an executive forced into early retirement or a secretary who’s been laid off, credit card debt offers equal opportunities for sleeplessness, stress, and financial problems.

Credit Card Debt: Falling into a Hole is Easier Than Climbing Out

Credit card debt is considered unsecured debt, which means that credit card companies have no collateral–your home or car–to fall back on if you fail to repay your credit card debt. Unsecured debt represents a higher risk, which is why it carries higher interest rates and other finance charges. High rates and fees add to your credit card balances, and making minimum payments is not enough to manage credit card debt effectively. Debt consolidation loans may be unavailable if you don’t qualify for a home equity loan, but credit counseling services can work with you to consolidate all of your debts under one repayment plan with one monthly payment. Credit counseling services typically provide a free initial consultation to review your finances and debt; they typically cannot help if your debt cannot be paid off within five years. If you do enter into a debt consolidation agreement with a consumer credit counseling service, they may be able to negotiate lower payments, interest rates, and fees to achieve affordable payments.

Getting Debt Help: Don’t Ignore the Elephant in the Room

Completing a credit counseling and debt consolidation program requires understanding  how and why you got into debt. If you’re a compulsive shopper, you can easily sabotage your debt consolidation and repayment program unless you determine and address the reasons for your uncontrolled spending.

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